Main points of investment

Event description

In 2015, the company achieved operating income of 45 million yuan, an increase of 21.25% over the same period last year, net profit of 50 million yuan, down 38.03% from the same period last year, and net profit margin of 111.32%, down 106.5 percentage points from the same period last year. EPS0.11 yuan. The company pays a cash dividend of 0.40 yuan for every 10 shares to all shareholders and plans to distribute 5 bonus shares for every 10 shares for all shareholders. In the first quarter of 2016, the company achieved operating income of 8.8248 million yuan, a decrease of 48.05% over the same period last year, with a net profit of-4.9611 million yuan and EPS-0.0108 yuan.

Event comment

Real estate has been stagnant for many years, and the main business needs to be confirmed urgently. The company used to focus on real estate development, but after 2011, the company stopped taking land and the real estate business came to a standstill. At present, the company's main sources of income are taxi business, property management and property leasing. The company's revenue from this module increased by 21.25% in 2015, resulting in a year-on-year increase in revenue. The company's net profit mainly comes from investment income and dividends from Greenland Holdings. At the end of the period, the asset-liability ratio of the company is 22%, and the financial structure is relatively sound. For a long time, the company lacked a clear main business, and it was proposed to merge into the sewage treatment business during the reporting period, but the reorganization ended in failure. In the absence of core competitiveness, the company is faced with the situation that strategic adjustment must be carried out.

Adjust the management level and establish an investment team. In 2015, the company took important steps in the management and operation level. Hiring a new general manager and introducing managers with an international background as the head of the investment management department, set up an investment team focusing on "Internet +", medical technology, and other emerging industries, and will actively look for investment opportunities in the future. with a view to providing new profit growth points for listed companies.

We will speed up the development of stock and continue to distribute investment. At present, the company's only stock is the southern logistics park in Minhang, Shanghai. in the future, the company will accelerate the overall planning of the park, form a feasible planning plan, and start the operation of the asset as soon as possible. bring benefits to the company as soon as possible. In terms of investment, the company contributed 30 million yuan to subscribe to the "Junzheng Equity Fund" in 2015, and contributed 18 million yuan to acquire 6.92 percent of the shares of "Shenzhou Automobile", with a view to adding new profit growth points for future development.

For the first time, coverage gives an "overweight" rating. The company's main business is vacant for a long time and has a strong determination to transform. The holding shares of Greenland and the southern logistics plots provide a certain margin of safety for the company.

We are optimistic about the new breakthrough in the company's strategic transformation. It is estimated that the company's EPS in 2016 and 2017 will be 0.16 yuan and 0.20 yuan per share, respectively, and the PE of the previous share price will be 102 and 81 times, respectively.

Risk hint: the strategic transformation is not as expected.