Event
On August 27, 2016, the company reported that its operating income in the first half of the year was 140 million, down 16.9% from the same period last year, and the net profit belonging to shareholders of listed companies was 50 million, a sharp increase of 48.5% over the same period last year.
Analysis of key points
The company's total revenue decreased in the first half of the year because the company spun off its forestry business in September last year, while the core asset, Huangting Plaza, was getting better and better, with a gross profit margin of more than 90% and contributing 120 million of its operating income during the reporting period, accounting for 81.7% of the company's operating income. With the improvement of the company's brand recognition, the optimization of business format and the refinement of tenant management, the passenger flow in Huangting Square continues to grow steadily. The average daily passenger flow in the first half of the year was 44000, with a maximum of 85000. In addition to the Imperial Court Plaza, the company has also expanded the real estate management of office buildings such as Huanggang Business Center (excluding Huangting V Hotel) and Gangxia Huangting Building.
The financial services sector has made steady progress: the company is the largest shareholder of Shenzhen concentric Investment Fund Co., Ltd. (holding 20.4% equity by the end of the reporting period). Concentric funds have certain advantages in fund management, micro-re-loans, venture capital and so on. On June 17, the Royal Court Fund plans to invest 350 million to acquire a 35% stake in the re-lending company of the concentric Fund. increase the capital to take control of Beijing Microinsurance Technology Co., Ltd. (the only company in the insurance industry that provides payment and settlement information platform services and Internet insurance services based on cloud platform model, with a 51% stake of 37 million). On July 20, Huangting Rongfa, a wholly-owned subsidiary of the company, plans to join other companies in initiating the establishment of overseas Chinese life insurance, contributing 200 million yuan to subscribe for 20% of the shares. In early August, the concentric Fund participated in the establishment of Love Life Insurance (registered capital of 1.7 billion) was approved by the Insurance Regulatory Commission. In the future, the building of life insurance platform is an important focus of the company's financial sector.
Operating the Qingqing World theme Park, the content service section is gradually clear: the content services characterized by children's theme, entertainment theme and timely life are well complementary with the company's inherent business assets, expanding financial services and shareholders' park assets, and are also the key elements of light assets expansion. On July 14, Huangting Real Estate, a wholly-owned company of the company, plans to buy 100% equity of Huangting Hotel Company of major shareholders for RMB 180 million and sign a contract for entrusted operation services and brand use to provide operation and management services for Qingqing World theme Park project (including hotels) (3% of guest room catering income and 5% service charge for scenic spot tickets).
Investment suggestion
We expect the company to achieve EPS0.11 yuan in 2016 and maintain its overweight rating.
Risk hint
The growth rate of operating income of Huangting Square is lower than expected, and there is a lack of substantial progress in the layout of financial business.