Main points of investment:
Event: the company announced to participate in the increase of capital and shares of Chinese and Indian culture, thus holding a 50% stake in Chinese and Indian culture.
The company signed a strategic cooperation agreement with Chinese and Indian cultures in 2015. On June 6, 2015, the company signed the Strategic Cooperation Framework Agreement with China-India Group Culture Co., Ltd. Chinese and Indian culture belongs to China Cultural Industry Development Group Corporation (hereinafter referred to as "China Wenfa Group") directly under the State-owned assets Supervision and Administration Commission of the State Council. It is the investment platform and strategic fulcrum for cultural and creative industries of China Wenfa Group, which mainly focuses on the development and operation of cultural and creative industrial parks and the investment of cultural enterprises. Focusing on cultural and creative industrial park + development and operation / exhibition / Internet / education and training, it is a professional service platform for cultural and creative industry consulting services, park operation and resource integration. The company will continue to increase the transformation of related industries in the future.
In 2016, the company officially held a 50% stake in Sino-Indian Culture. On November 8, 2016, the company signed a "capital increase agreement" with China Cultural Industry Development Group Corporation and Sino-Indian Culture in Beijing. The company formally participates in Sino-Indian culture by increasing the registered capital to RMB 60 million, and the increased registered capital of RMB 30 million shall be fully subscribed by the company. after the increase, the company will hold 50% of the equity of Sino-Indian culture. China Wenfa Group will hold 50% of Sino-Indian Culture, and the company will consolidate its financial statements. This participation in capital increase and share expansion is part of the company's implementation of the previous strategic cooperation agreement. The company will realize the common development of the company's commercial real estate and cultural industry through the dominant position of Chinese and Indian culture in the market of cultural and creative industries. Promote the sustainable development of the company's main business, but also marks the company has formally taken a step in the transformation to culture-related industries.
The cooperation between the company and power construction real estate has been further deepened. The company began to cooperate with power construction real estate in 2012, first by the former major shareholder Xu Xiaoming transferred 29.75% of the shares formally introduced into power construction real estate. Since then, Dianjian Real Estate has officially become a controlling shareholder of 41% through an offer, and the company has officially become a platform of listed companies under the Central Electric Construction Real Estate through private enterprises. Since then, the two sides have had a lot of cooperation in land acquisition and financing, and in April 2016, the two sides signed a "Memorandum of Cooperation" with Hubei Electric Power Construction No. 1 Engineering Company in Wuhan to transform and utilize the old factory resources of the provincial power construction company. carry out urban renewal and reach a cooperative intention to create industrial parks such as cultural creativity and innovative industries. At the same time, in May 2016, Xue Zhiyong, secretary of the party committee of Dianjian Real Estate, became the chairman of the company. The cooperation between the company and Power Construction Real Estate is expected to take another great step forward.
Investment suggestion: the company is expected to earn 0.30 and 0.40 yuan per share in 2016 and 2017, respectively. As of November 8, the company closed at 5.71 yuan, compared with 19.03 times PE in 2016 and 14.28 times PE in 2017. Considering the future growth of the company, the company is valued at 25 times PE in 2016, corresponding to the target price of 7.50 yuan, and maintaining the "overweight" rating.
The main uncertain factors. The recovery in the fundamentals of the industry fell short of expectations.