Main points of investment
Events:
The company announces its annual report for 2015 and quarterly report for 2016.
The performance grew steadily and the net profit increased significantly. The company achieved operating income of 1.117 billion yuan in 2015, an increase of 35.47% over the same period last year, and the net profit belonging to shareholders of listed companies was 102 million yuan, an increase of 76.52% over the same period last year. The consolidated table of Cheng Dian Medical Star significantly increased the company's operating income and net profit in 2015. in 2015, Cheng Dian Medical Star achieved a net profit of 40.82 million yuan, higher than the promised 3992 million yuan 2.25%. The company distributes the national market through the "Zhicheng model" and creates a vertical industrial chain with market segments through mergers and acquisitions. In 2015, the operating income of intelligent buildings reached 697 million yuan, an increase of 23.81% over the same period last year, accounting for 62.46% of the company's operating income. Basic earnings per share is 0.15 yuan per share. In 2016, the operating income of Q1 Company reached 241 million yuan, an increase of 25.07% over the same period last year, and the net profit belonging to shareholders of listed companies was 9.1844 million yuan, an increase of 21.31% over the same period last year.
Profitability continues to improve, during the period of cost control is good, the cash position is relatively stable. The company's comprehensive gross profit margin in 2015 was 22.85%, an increase of 0.07 pct over the same period last year; net profit margin increased by 2.77pct to 10.27%. The increase in net interest rate is related to the significant increase in non-operating income, which increased by 2.35pct to 2.88% of sales income in 2015.
During this period, the expense rate continued to decline, with the year-on-year reduction of 1.08pct to 11.47% in 2015, of which the management expense rate reduced 0.65pct. Operating net cash flow increased slightly from 79.7041 million yuan in 2014 to 80.0486 million yuan in 2015.
The company's profit data improved steadily quarter by quarter, benefiting from the merger of electric doctors and stars, a sharp increase in operating income in the fourth quarter. According to the quarter of 2015, the operating income of Q1, Q2, Q3 and Q4 reached 191 million yuan, 210 million yuan, 270 million yuan and 443 million yuan respectively, up 16.23%, 6.57%, 29.81% and 75.31% respectively over the same period last year. The net profit of returning to the mother was 7.5713 million yuan, 27.0167 million yuan, 1729.19 yuan and 5034.4 yuan respectively, up 22.11%, 14.22%, 62.98% and 188.58% respectively. The sharp increase in net profit in the fourth quarter is mainly due to the consolidation of electric medical stars.
Structural adjustment has achieved remarkable results. In 2015, Smart Medical achieved operating income of 216 million yuan, an increase of 87% over the same period last year, accounting for 19.34% of the company's operating income. Smart Medical achieved a gross profit margin of 30.96%, an increase of 3.09% over the same period last year, initially realizing the "medical first" strategy. Smart energy conservation realized operating income of 57.3549 million yuan and gross profit margin of 48.25%. A year-on-year increase of 6.86%. In 2015, the company undertook and implemented six contract energy management projects, providing itemized metering engineering and energy consumption monitoring and management platform services for more than 400 state office buildings and large public buildings in Shanghai, with 1.45 billion kilowatt-hours of monitored electricity, an increase of 64.77% over the same period last year.
Mergers and acquisitions into electric medical stars to deepen the industrial chain, will increase the rapid business transformation. In the third quarter of 2015, the company completed the acquisition of Cheng Dian Medical Star, jointly improved and continuously optimized the intelligent medical industry chain, marking the company's initial success in the field of medical information. In 2015, the power generation medical star exceeded the promised net profit. In March 2016, the company's non-public offering was examined and approved by the CSRC, raising no more than 1.00386 billion yuan at a price of no less than 8.58 yuan per share.
The funds raised will be invested in smart energy conservation and user-side energy Internet platform construction and operation projects (352 million yuan), smart medical care and smart pension platform construction projects (132 million yuan), building intelligence and information construction projects (165 million yuan), "Zhicheng model" and regional center expansion project (125 million yuan), Smart City Research Institute construction project (91.9 million yuan) and supplementary working capital (139 million yuan). The integrated cloud platform for the aged project covers 1 pension institution, 1 pension service information data center, 379 home care service centers and 9 home care service centers. The "smart medicine" project mainly includes seven platforms: Chongzhou intelligent medical information platform, public health, medical services, medical security, drug management, family planning and comprehensive management, as well as the construction of resident health cards, smart medical cloud data centers and infrastructure.
Smart environmental protection is included in the important sub-areas of the company's strategic development. The company announced that the former Shanghai Changfeng Yanhua Technology Co., Ltd. has now changed its name to Shanghai Changfeng Yanhua Wisdom Environmental Protection Technology Co., Ltd., gradually forming an environmental protection industry with Yanhua characteristics. Changfeng Yanhua takes the environmental protection project in Putuo District of Shanghai as the starting point, enters the Shanghai market, takes pollution management as the main line, takes into account environmental quality and environmental government management, and provides technical support for the overall realization of a green ecological city.
Risk hints: macroeconomic fluctuation risk, payback risk, acquisition less than expected risk and so on.
Profit forecast and valuation: we forecast the company's EPS0.21/0.29/0.35 yuan from 2016 to 2018. Taking into account the company's growth and industry valuation, we believe that we can give the company a market capitalization of 12-15 billion in 16 years, corresponding to the target price of 17-20 yuan, and maintain the "recommended" rating.