Event: the company announced that the company announced three quarterly reports: revenue in the first three quarters of 16 was 453 million yuan, up 4.38% from the same period last year (previous value + 32.50%); net profit attributable to the company was 90 million yuan, up 17.27% (previous value-34.59%); EPS was 0.47.
The performance increased slightly and the high gross profit margin continued: 1) small-step growth: in the first three quarters of 16, the company achieved revenue of 453 million yuan, an increase of 4.38% over the same period last year (+ 32.50%), and revenue growth decreased by 28.12 PC over the same period last year; realized attributable net profit of 90 million yuan, an increase of 17.27% (previous value-34.59%), and the annual attributable net profit is expected to exceed 150 million yuan; 2) the high gross profit margin continues:
During the reporting period, the company's overall gross profit margin was 93.5%, a decrease of 1.30pc compared with the same period last year, mainly due to the decline in the gross margin level of traditional online marketing services, which still accounts for a large proportion of revenue, reflecting the trend of intensified competition in traditional trading services. at the same time, narrow trading services also pay more and more attention to results-oriented, and gross profit space will still receive a certain backlog. Put forward more and higher requirements for the company's offline service and professional ability in the future. 3) low leverage and stable funds: during the reporting period, ROE was 9.35%, basically stable compared with the same period last year; the asset-liability ratio was 16.96%, an increase of 0.49pc over the same period last year With a monetary capital of more than 600 million, in addition, the company is recognized as a high-tech enterprise and can enjoy a preferential enterprise income tax rate of 15% for three consecutive years after recognition, so the company income tax expense during the reporting period is 43.48% lower than that of the previous period. increase the company's net interest rate to a certain extent.
The "31st" system is getting better: in recent years, the company's business has gradually sought to develop from services such as new housing, second-hand housing brokerage and advertising in a narrow sense to a real estate service system that extends from transaction to the integration of real estate finance, leasing and asset management. Including actively building "home" services based on platforms such as "365 Taofu", Internet home services based on platforms such as "decorating treasures and robbing foremen", and mobile life services based on "urban mobile matrix", plus financial services throughout the entire business chain mentioned above.
Small loan operation is good, financial service product line is extended: the company's Internet financial sector has been greatly affected by the tightening of P2P regulation so far this year, but the gross profit margin of Internet financial platform business still rose by 52 pct in the first half of the year, and the extension expansion is advancing steadily. In January this year, the company announced that it planned to contribute a total of 280 million shares to set up a small loan company (accounting for 80% in total). The small loan company was officially established in June, and the loan balance of the small loan company reached 360 million yuan by the end of the reporting period.
It is promoting major asset restructuring and intends to acquire the "main investment and asset management target company": on September 7 this year, the company announced that it had applied for suspension of trading for planning major matters. According to the announcement, the company intends to use cash or cash plus directional additional shares to acquire all the shares of the company which is the subject of main investment and asset management, with an investment amount of 200-300 million; it was announced again on the 23rd that it had reached the standard of major asset restructuring due to the expected "expansion of the scope and amount of relevant transactions exceeding expectations" and transferred to the major asset restructuring procedure; so far, the major asset restructuring is still in progress.
Investment suggestion: the company has low leverage, stable capital and high gross profits. in recent years, it has actively carried out business exploration in stock housing, leasing, asset management and other aspects, and the product line has been extended. at present, the company is promoting the "acquisition of main investment and asset management companies".
We expect that the company's EPS in 2016-2018 will be 0.80,1.03,1.37, and the corresponding share price PE multiple will be 38.8X, 30.1X, 22.6X, maintaining the "buy-A" rating, with a six-month target price of 50.15 yuan.
Risk Tip: profits decline and New Business performance falls short of expectations