The company released its mid-2016 report, with operating income of 525 million yuan in the first half of the year, down 17.49% from the same period last year, and net profit of 46 million yuan, an increase of 28.96% over the same period last year.
Second, analyze and judge the sale of shares in subsidiaries and contribute to investment income. In the first half of the year, the company transferred 51% of its subsidiaries Hairong Xingda and Longtianlu to Wanli Rongrui (the actual controller is Citic Industrial Fund), resulting in a year-on-year decline in operating income, but at the same time brought 308 million yuan in investment income, a significant contribution to performance. The company's main business of shopping center operation and management has developed steadily, and the number of shopping malls has grown to nearly 40. It is proposed to acquire the assets of shopping centers under construction in Shanxi and Qingdao, and the market share is expected to continue to increase in the future.
Promote the light asset strategy and focus on the capital operation company's light asset operation strategy. After selling shares in two subsidiaries in the first half of the year, they will be entrusted to manage the shopping mall properties of the subsidiaries and collect management fees, while retaining the actual operation rights of the shopping center. This kind of equity transfer helps companies to improve the liquidity of assets, achieve the recycling of capital, and bring higher investment returns. The company has already issued BHG Reit in Singapore. In the future, the company may continue to sell mature properties to Reit and provide management services to improve cash flow, optimize financial structure and improve operational efficiency.
Join hands with CITIC Industrial Fund to speed up the pace of equity investment in the first half of the year, the company plans to invest in Shanghai Rongyu, Longzhu Tianli, Shenzhen Chi Shan, and set up a subsidiary in Zhuhai, which will mainly invest in upstream and downstream industry projects that can bring synergy to the main business of the shopping center in the future. The company plans to increase 860 million yuan to introduce CITIC Industrial Fund as the second largest shareholder. Previously, the two sides have successfully cooperated with each other to invest in projects such as "singing bar" and "ele.me" to effectively assist the development of the company's main business while earning profits. We believe that in the future, the company will continue to accelerate the pace of equity investment for the purpose of financial investment and strategic cooperation, relying on the strong project resource advantages of CITIC Industrial Fund.
Third, profit forecast and investment suggestions after the introduction of CITIC Industrial Fund, the company is expected to take advantage of its project resources to increase equity investment and cultivate new profit growth points. In addition, the company continues to promote the light asset strategy, the sale of shares in subsidiaries will significantly contribute to the performance. It is estimated that the EPS from 2016 to 2018 will be 0.16,0.23,0.32 yuan, maintaining the "highly recommended" rating.
Fourth, the risk prompts that the progress of fixed increase is lower than expected, and the performance of equity investment projects is lower than expected.
