Event

The company released its semi-annual report for 2016. In the first half of this year, the company achieved operating income of 666 million yuan, down 41.74% from the same period last year. The net profit belonging to shareholders of listed companies was 72.5958 million yuan, up 2000.6% from the same period last year, and earnings per share was 0.24 yuan, up 200% from the same period last year.

Comment

In the first half of this year, the metal trading center achieved an operating income of 910 million yuan and a net profit of 165 million yuan, compared with a loss of 10.9 million yuan in the same period last year. The company invested 20 million yuan to hold 40% of its shares and entrusted ran Rong to operate. Ran Rong promised that the distributable profits from 2015 to 2017 would not be less than 55 million, 77 million and 80 million (due to the extension of the preparation period of the trading platform, the operating performance guarantee interval was extended for 6 months). The big increase in the performance of the metal trading center is mainly due to the popularity of the commodity trading market. The decline in the company's overall revenue is due to a year-on-year decline in revenue from the supply chain management business.

The Land Jiaotong Center takes intelligent logistics and platform function expansion as the main line of development: the Land Jiaotong Center is the core of the company's logistics sector, building a cross-border e-commerce supply chain service platform to achieve an average daily transaction volume of nearly 1,000 orders; start cooperation with South American countries, Japan, South Korea, Eastern Europe and other e-commerce platforms in Brazil; 56135 platform products continue to be optimized. In the first half of this year, the Lujiao Center achieved an income of 270 million yuan and a net profit of 10.12 million yuan.

Changwang Technology plans to acquire Zhongtian Rocket and cut into the military industry: the subsidiary of Changwang Technology has landed on the new third board, mainly engaged in the research and production of sensors and detection systems for high-altitude detection and ground detection, with a net profit of 7.46 million yuan in the first half of this year. Changwang Technology plans to acquire 100% stake in Zhongtian Rocket, which belongs to the Aerospace Power Technology Research Institute, and has strong R & D capabilities. Changwang Technology has profound manufacturing experience and will complement each other's advantages.

The company plans to set up a 500 million yuan M & A fund, and will actively invest in emerging industries in the primary market in the future: the company will participate in the establishment of fixed growth (M & A) funds, plan to explore the value depressions in some emerging industries, knowledge-intensive industries and high-growth industries, and acquire and merge high-quality project enterprises.

Investment suggestion

The Changjiang United Metal Trading Center, which is 40% owned by the company, greatly exceeded expectations. The logistics business takes Lujiao Center as the core and creates a wisdom circulation platform. Changwang Technology, a subsidiary, intends to acquire Zhongtian Rocket, which has a good momentum of development. Given that share prices have risen sharply to reflect expectations, a "overweight" rating is given.

Risk

The compliance risk of the metal trading center and the risk of declining trading volume, the risk of fierce competition in the industry, and so on.