Performance summary: in the first half of 2016, the company achieved operating income of 643 million yuan, down 5.26% from the same period last year, while the net profit attributable to shareholders was 10.67 million yuan, an increase of 136.42% over the same period last year. During the reporting period, the company turned losses to profits, mainly due to the completion of the sale of the stake in Dacheng New Energy, a subsidiary, in the second half of 2015, and Dacheng New Energy's perennial losses were the main burden that dragged down the company's performance in the past.
During the reporting period, Aike Semiconductor, a wholly owned subsidiary, only reported its performance in June, while its net profit in June was 15.73 million yuan. Therefore, the comprehensive consolidation of Aike Semiconductor will give a big boost to the company's performance, and the company's full-year net profit is expected to grow rapidly.
Gross profit margin hit bottom sharply, but with the consolidation of IC business, gross profit margin will rise step by step. During the reporting period, the company's overall gross profit margin was 16.50%, a year-on-year decline of 11.49 percentage points, mainly due to two reasons: 1. Zhenjiang area real estate inventory pressure, the company adopted price reduction promotion strategy, real estate business gross profit margin fell 8.69% year-on-year, 20.81% 2. The gross profit margin of trade, logistics and service business fell 11.23 percentage points to 5.83% compared with the same period last year. With the comprehensive consolidation of IC business with high gross margin, the company's gross profit margin is expected to pick up step by step.
Relying on the leading advantage of Aike Semiconductor, we continue to deepen the strategic layout of the IC industry. After the wholly-owned acquisition of Ecor Semiconductor, the leading independent integrated circuit test service provider in China, the company continuously deepened its strategic layout in the field of IC, and announced in July 2016 that it would increase its capital by 690 million yuan. At the same time, the company signed a "framework agreement" with seven companies, including Zhen Hi-Tech, and set up a merger and acquisition fund of 5 billion yuan to cultivate high-quality targets for the development of the company's integrated circuits and other emerging industries. The domestic integrated circuit industry is in a period of rapid development, Aiko Semiconductor has high-quality customer resources, and independent semiconductor testing industry has high technical barriers, the company will fully benefit from the rapid development of the industry.
Profit forecast and rating. It is estimated that the growth rate of net profit from 2016 to 2018 will be 601%, 112% and 25%, respectively. The EPS will be 0.16 yuan 0.34 yuan and 0.42 yuan respectively, and will be rated as "increasing holdings".
Risk hint: commercial real estate delivery is not as expected; Aiko Semiconductor performance is not as expected.