Events:
The company announces its 2016 semi-annual report.
The company's performance is growing steadily, and the business transformation is expected to form a new breakthrough. In the first half of 2016, the company achieved operating income of 924 million yuan, an increase of 10.66 percent over the same period last year. Net profit belonging to shareholders of listed companies was 79 million yuan, up 4.59 percent over the same period last year, and basic earnings per share was 0.05yuan per share. In 2016, Q1 and Q2 companies achieved operating income of 4.31 yuan and 494 million yuan, up 19.38% and 4.03% over the same period last year, while the net profit of shareholders belonging to listed companies was 3492.93 yuan and 43.8827 million yuan, up 10.75% and 0.15% over the same period last year. From the point of view of business sources, commercial and industrial revenue accounted for 33.98%, followed by subway and municipal sector revenue accounted for 22.48% and 21.82% respectively, and traditional petroleum and petrochemical semi-plate business accounted for only 8.25%. As the company continues to acquire high-quality navigable assets, the layout of the industry chain in the navigation field is becoming more and more perfect, and business transformation may usher in a breakthrough.
Profitability declined, and the expense rate increased year-on-year. The company's comprehensive gross profit margin for the first half of 2016 was 23.24%, down 2.30 pct from a year earlier; net profit margin fell 0.40pct to 8.41% from a year earlier.
During the period, the expense rate continued to grow, with an increase of 1.30pct to 13.19% over the same period last year. The increase in effective costs was the main reason for the increase in the expense rate during the period, while the management expense rate increased by 0.87pct to 9.80% over the same period last year.
The operating net cash flow increased from-126 million yuan in the first half of 2015 to-137 million yuan in the first half of 2016, and the cash flow situation was basically flat.
We will increase by 431 million yuan to acquire assets, consolidate the main business, change the business model, and lay out the whole life business cycle in the field of navigation. The company announced on June 1 that it intends to issue 52.5 million shares at a price of 8.2 yuan per share, and the funds raised will be used to acquire 100% equity in Lixing project (300 million yuan), 100% equity in theme latitude (110 million yuan), and 49% equity in Zhejiang Zhongqing (70 million yuan). Lock-up period for three years. Lixing Engineering is mainly engaged in the design and manufacture of construction machinery and electrical automation equipment, with a commitment to achieve a net profit of not less than 29 million, 32.5 million and 36.5 million in 16-18 years. This acquisition will further consolidate the company's traditional main business and ensure the stable development of the company's performance. The theme latitude is mainly engaged in the planning and design of general aviation towns and theme industrial parks, promising to achieve net profits of not less than 9.1 million, 11 million and 13 million in 16-18. The company has acquired a 51% stake in Zhejiang Zhongqing in 2015. Zhejiang Zhongqing Aviation Club focuses on the investment, construction and service of general aviation airports. After the completion of this acquisition, the company has a better layout in the field of navigation, and has made a breakthrough in the upgrading of business capabilities in the field of navigation airport operation services. The company continues to go deep into the field of navigation business, with the acquisition company's rich experience in navigable airports for many years, and with the company's own excellent engineering strength, the company has changed its business model. layout in the field of general aviation "design consulting + construction investment + operation and maintenance" whole life cycle industry.
Actively expand the field of aviation business and cultivate new profit growth points. The company announced on July 6 that it won the bid for the construction project of the second phase of the expansion of the airfield road and ancillary project (FXQ-CD-003) of Haikou Meilan International Airport, with a winning bid amount of 481 million yuan, accounting for 24.90% of the company's annual operating income in 2015.
It may have a great impact on the company's performance in the future. In May 2016, the company invested 500 million yuan to set up Quantai Navigation Co., Ltd., to enter the whole field of navigation business. The company's first navigation project, the main project of Anji General Aviation Airport, has been completed and put into operation in the third quarter of this year. Yangzhou Gaoyou Huxi Navigation Industrial Base is going through the relevant examination and approval formalities; in the first half of the year, the company signed a general aviation industry investment project framework agreement with local governments such as Huangshan in Anhui, Rudong in Jiangsu, and Enping in Guangdong and carried out follow-up work one after another. During the 13th five-year Plan period, China is expected to build more than 500 navigable airports, the market scale is unprecedented, the company continues to acquire high-quality navigation industry assets, integrate superior resources, navigation business is expected to achieve a new stable profit point. We will ensure the steady growth of the main industry and improve the traditional industrial platform of the engineering service industry. In 2015, the company acquired 100% equity in Beijing Field Road, and obtained qualifications such as first-class general contracting for municipal public works, first-class professional contracting for airport road projects, second-level professional contracting for tunnel projects, and general contracting for housing construction projects. In November 2015, the company acquired the remaining 59.33% equity interest in Beijing Zhongyan, improving the company's comprehensive strength in project management and monitoring. Beijing Zhongyan has become a wholly-owned subsidiary. In 2015, the company established Sinochem Geotechnical Design and Research Co., Ltd., to enhance its R & D and innovation capability; Jiazhiding Real Estate Co., Ltd., to enhance the company's regional market service capacity; and Shanghai, a subsidiary of Qiangqiang Investment Management Co., Ltd. to carry out capital operations such as mergers and acquisitions, equity investment and industrial investment in the same industry and related industrial projects.
Set foot in emerging industries and cultivate multi-dimensional development space. In 2014, the company invested in setting up Kyushu DreamWorks International Culture Communication Co., Ltd., which participated in filming TV dramas such as "two Flowers" and "Mu Yun Ji at Sea". The investment project IP has outstanding features and great potential for investment and operation. In April 2015, Sinochem Geotechnical Investment Management Co., Ltd. invested 50 million yuan to set up a Sino-foreign joint venture with the United States, with a shareholding of 51%, which will promote Chelsio to enter the Chinese market and gradually realize the localization of Chelsio technology research and development, applications and products. Participate in Renren Bank to intervene in the field of Internet finance and try to invest in the equity of Internet financial enterprises. The company plans to invest 150 million yuan and six other corporate institutions to jointly set up a life insurance company, with a shareholding ratio of 15%, to invest in the insurance field.
Risk hints: macroeconomic policy change risk, M & A not up to expectations, business extension risk and so on.
Earnings forecast and valuation: we forecast that the company's 18-year EPS in 2016 will be 0.21max 0.27max 0.32 yuan, corresponding to the 2016-2018 valuation will be 37-28-24 times, maintaining the "recommended" rating.