Event: the company announces three quarterly reports in 2016.
In the first three quarters of 2016, the company realized a year-on-year return to net profit. In the first three quarters of 2016, the company completed operating income of 1.779 billion yuan, an increase of 87.86% over the same period last year. The net profit attributed to the owners of the listed company was 11 million yuan, realizing earnings per share of 0.01 yuan, turning losses into profits over the same period last year.
The company's total assets reached 196.71 yuan in the first three quarters of 2016. By the end of the reporting period, the company's total assets were 19.671 billion yuan, the total liabilities were 14.688 billion yuan, and the asset-liability ratio was 74.67%. The amount of accounts received in advance was 1.091 billion yuan, accounting for 7.43% of the total liabilities. In terms of liability structure, short-term loans and non-current liabilities due within one year totaled 1.41 billion yuan, accounting for 9.60% of the total liabilities, and the net cash flow of operating activities was 16 million yuan.
Management change in place, and power construction real estate cooperation continues to move forward. 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 more cooperation in land acquisition and financing, and signed a "Memorandum of Cooperation" with Hubei Electric Power Construction No. 1 Engineering Company in Wuhan in April 2016. In May 2016, the company completed the change of the board of directors, with Xue Zhiyong, the party committee secretary of DCC Real Estate, as the chairman of the company, and the cooperation between the company and DMC Real Estate has taken a great step forward.
The company is gradually transforming the cultural and creative related industries. In addition to the cooperation with Hubei Electric Power Construction No. 1 Engineering Company in cultural and creative industries, 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.
Investment suggestion: the company is expected to earn 0.30 and 0.40 yuan per share in 2016 and 2017, respectively. As of Oct. 24, the company closed at 5.72 yuan, corresponding to 19.07 times PE in 2016 and 14.30 times PE in 2017. Taking into account the future growth of the company, give a valuation of 25 times PE in 2016, corresponding to the target price of 7.50 yuan, maintain the "overweight" rating.
The main uncertain factors. The recovery in the fundamentals of the industry fell short of expectations.