The net profit after deducting non-profit in the first three quarters increased by 11.3% compared with the same period last year, which was basically in line with expectations. Haiyin shares announced three quarterly results: the operating income of 1yuan 3Q was 1.42 billion yuan, an increase of 17.6% over the same period last year. The net profit belonging to the parent company was 130 million yuan, up 5.7% from the same period last year, and 11.3% after deducting non-operating income (mainly due to a decrease of 47.02% to 15.02 million yuan), corresponding to a profit of 0.06 yuan per share, which is basically in line with our expectations. From a quarterly point of view, 3Q/2Q/1Q revenue is + 17.0%, 16.2%, 19.7%, respectively, and net profit is + 4.7%, 38.4%, 25.4%, respectively.
1. Income keeps growing rapidly, and subsequent profit growth is expected to accelerate. In the context of the current overall consumer downturn (retail sales of the top 100 fell 2.0% year-on-year in the first three quarters), it is not easy for the company to achieve revenue of + 18% year-on-year, which also shows that the Haiyin ecosystem is ushering in a harvest. The growth rate of the profit side (1x 3Q net profit + 6% compared with the same period last year) is slower than that of the revenue side, which is expected to be related to the higher related expenses caused by the cultivation of the company's current new business (finance, entertainment, new energy vehicles and charging piles, etc.). Follow-up with the sea printing ecology is becoming more and more perfect and mature, performance growth is expected to accelerate.
2. The slight decline in gross profit margin and the rapid increase in sales expenses have a certain drag on the performance. The overall gross profit margin of 1salary 3Q decreased slightly by 0.3 percentage points to 40.2% compared with the same period last year; the overall expense rate rose 1.5 percentage points to 25.5% during the period, mainly due to the 2.1% increase in sales expense rate compared with the same period last year (due to the increase in sales commission and the change in merger scope in the real estate sector). Non-operating income fell 47.02% year-on-year to 15.02 million yuan (mainly due to demolition compensation in the same period last year), which also had a certain drag on performance.
Trend of development
The main contents are as follows: 1. The extension of Haiyin ecological circle is advancing rapidly. Since the beginning of this year, the company has stepped up the capital operation of the four major sectors of the Haiyin ecosystem: ① Finance: initiating the establishment of Huacheng Life Insurance; setting up Internet small loans; completing the strategic investment in Maida Digital and becoming its third largest shareholder (holding 6.04%); completing the acquisition of Xinhui e-commerce; holding hands with Guangdong UnionPay to build China's first cloud flash payment experience base. ② entertainment: continue to acquire the remaining 25% stake in Red Sun and 49% equity in Nanchang New Central Plains Performing Arts; issue 1.1 billion yuan of convertible bonds to build a commercial and entertainment complex near Shanghai Walt Disney Company; ③ Business: acquire 100% equity in Guangzhou Youli to build a "business incubator"
And "e-commerce demonstration base" to acquire 80% stake in Dongfang property, layout Guangzhou professional market transformation and upgrading; invest in China Food City project to promote business and entertainment interactive symbiosis; ④ new energy vehicles and charging piles: relying on the advantages of rich property assets and business operation experience in Guangzhou, join hands with advantageous enterprises to layout new energy vehicles and charging operations and other businesses to speed up the transformation and innovation of new business.
2. Convertible bonds are successfully issued with a conversion price of 5.26 yuan per share, and the future management has a strong incentive to promote the conversion of convertible bonds into shares (during the conversion period, when the closing price of at least 15 trading days in any of the 30 consecutive trading days is not less than 130% of the conversion price of the current period, the conversion clause can be triggered indirectly, that is, 6.84 yuan), and the stock price is still below the conversion price.
Valuation and suggestion
We keep our full-year earnings per share forecast for 2016 and 2017 unchanged. We maintain our recommended rating and target price of 6.70 yuan, which is 29.09% upside from the current share price. The target price corresponds to 51 times PCompare E in 2017.
Risk.
The schedule of commercial projects is low, the real estate settlement fluctuates, and the risk of cross-border M & An integration.