Main points of investment:
The company publishes its 2016 semi-annual report. In the first half of the year, the company's operating income and homecoming net profit decreased by 8.77% and 20.52% respectively compared with the same period last year. The performance is basically in line with our expectations. In the first half of 2016, the company achieved operating income of 2.515 billion yuan, down 8.77% from the same period last year, and realized net profit belonging to the parent company of 110 million yuan, down 20.52% from the same period last year, basically in line with our expectations of 100 million yuan. The decrease in the company's operating income and home net profit in the first half of the year was due to a decrease in retail store sales, with sales in Hangzhou down 7.97% and Jinhua sales down 27.22%.
Due to the impact of e-commerce on physical retail, the retail sales of 100 retail enterprises fell 3.2% in the first half of the year compared with the same period last year. The company's retail business seeks breakthroughs: (1) actively carry out business model reform and shopping mall adjustment, in which Hangzhou Building explores the creation of three theme modules: children's parent-child, health campaign and modern family, and takes the children's parent-child module as a pilot. Do full-category products, full-process professional services, omni-channel sales, and build innovative children's main business modules. (2) actively promote the construction of the new project. The construction of the main structure of the new Block B (Sanli Project) of Hangzhou Mansion was completed in April, the bidding of Plaza 501 was completed, office rental and commercial investment continued to move forward, of which commercial investment has entered the finishing stage. some brands have entered the construction site.
Build a high-end, professional and personalized one-stop health management service platform. The company, together with Baida Group and Dean Diagnostics, jointly funded the establishment of Hangzhou full-process International Health and Medical Management Center Co., Ltd., with the aim of providing full-process health management and medical services covering the whole life cycle to high net worth customers. work together to build a medical service platform. The health management company went through the formalities of establishment registration and obtained the business license on December 22, 2015, of which Hangzhou Xiebai contributed 27 million yuan, accounting for 45% of the registered capital, making it the largest shareholder. At present, the shareholders of the health management company have all invested in place, and the positioning, business model and main business sectors have been clearly defined, and the Medical Mall investment promotion work is being promoted as planned.
Increase capital holding Yuesheng Sports, take the G20 Forum and the Asian Games as an opportunity to speed up the exploration of sports industry integration. The company invested 9.2921 million yuan to increase the capital of Hangzhou Yuesheng Sports Brokerage Co., Ltd., with a shareholding ratio of 69.5% after the capital increase, which was completed on March 28, and the preparatory work was basically completed. At the same time, actively seek new strategic partners to prepare for round B financing. Yuesheng's venues are rich in resources. We believe that the current rapid expansion of China's sports industry under the guidance of the government and market linkage coincides with Hangzhou hosting the G20 International Economic Cooperation Forum in 2016 and the Asian Games in 2022. The company may continue to actively explore business opportunities for the integration of the sports industry in the later stage.
Maintain earnings forecasts and maintain "overweight" ratings. We maintain our previous profit forecast that the company's operating income for 2016-2018 is expected to be 56.47,62.08 and 6.579 billion yuan, and the return net profit is 2.54,3.23 and 365 million yuan, an increase of 12.2%, 27.3% and 12.9% over the same period last year, and the EPS is 0.35,0.45,0.51 yuan respectively. The corresponding pre-valuation PE is 29-23-20 times.
Be optimistic about the company's "RMSP plan" (R-Retail, M-Healthcare, S-Sports / Service, P-platform) and maintain the "overweight" rating.