Events:
The company released its three quarterly reports for 2016. The company achieved operating income of 762 million yuan in the third quarter, a decrease of 9.56% over the same period last year, and a cumulative operating income of 2.7 billion yuan in the first three quarters, a decrease of 0.44% compared with the same period last year. During the reporting period, the net profit attributed to the parent company was 11 million yuan, a decrease of 60.22% compared with the same period last year. The cumulative net profit attributed to the parent company in the first three quarters was 129 million yuan, lower than the original forecast of 140 million yuan.
Main points of investment:
The results in the third quarter were slightly lower than expected, mainly affected by the delay in the confirmation of gas installation fees. During the reporting period, the company achieved an operating income of 762 million yuan, a decrease of 9.56% over the same period last year, and a cumulative operating income of 2.7 billion yuan in the first three quarters, a decrease of 0.44% compared with the same period last year. During the reporting period, due to the delay in the recognition of the sale of Zhongbei bus assets and gas installation fees, the company's operating income decreased slightly compared with the same period last year. The third quarter results are affected by the progress of gas installation fee confirmation.
The fourth quarter is expected to enter the peak season of gas consumption, the future transformation and upgrading of "integrated energy service providers". In 2015, the company realized operating income of 3.984 billion yuan, including 1.844 billion yuan from gas sales and 516 million yuan from project construction. We believe that the delay in the recognition of project construction revenue is the main reason for the company's large fluctuations in revenue in the third quarter, and is expected to pick up in the fourth quarter. In the future, based on the existing business areas, the company will expand the business of "pipeline gas" and "non-pipeline gas" around the comprehensive utilization of natural gas, and vigorously explore business development opportunities such as CNG gas filling, LNG gas filling, LNG point supply, distributed energy and so on.
Based on Nanjing with passenger transport industry resources, the development of charging pile business has obvious advantages. Jiangbei Zhongbei, a subsidiary of the company, operates 2363 taxis, accounting for about 20% of the total taxi market in Nanjing, of which Nanjing Hexi New Energy passenger Transport Service Co., Ltd. operates 300 electric taxis. Nanjing Public Transport (Group), a subsidiary of Nanjing Urban Construction, has 369 operating routes and 5646 buses. Recently, the company signed the "Joint Venture Agreement on the Establishment of Nanjing New Energy Smart City Development Co., Ltd." together with Jinzhi Technology to carry out the construction and operation of electric vehicle charging piles, charging stations and charging towers related to new energy and smart city in Nanjing, smart parking services, photovoltaic-based contract energy management, distributed energy and other businesses. Based on the resources of the passenger transport industry, the company has obvious advantages in carrying out charging pile business, and is expected to create a new profit growth point.
Profit forecast and rating: we keep the company's profit forecast unchanged. It is estimated that the company's net profit attributable to the parent company from 2016 to 2018 is 264 million yuan, 292 million yuan and 334 million yuan respectively, and the corresponding EPS is 0.46 yuan, 0.51 yuan and 0.58 yuan per share, respectively, and the corresponding PE is 22 times, 20 times and 18 times respectively. The valuation level of the company is low, and the future delivery business business model is expected to innovate, and the long-term prosperity of the gas industry can be improved. Keep the "buy" rating unchanged.