I. Overview of events
According to the 2015 annual report, the company reported that its operating income for the whole year was 1.103 billion yuan, an increase of 4.85% over the same period last year; the net profit belonging to shareholders of listed companies was 141 million yuan, down 9.62% from the same period last year; net profit after deducting non-recurrent profit and loss was 91 million yuan, an increase of 51.05% over the same period last year; earnings per share are 0.37 yuan. In addition, the company intends to distribute a cash dividend of 1.20 yuan for every 10 shares to all shareholders, totaling 45 million yuan.
II. Analysis and judgment
Department store trusteeship ensures profits and stable performance.
In 2015, the company's Hangzhou department store realized operating income of 1.029 billion yuan, accounting for 93.34% of the company's total revenue, contributing 124 million yuan to profit, accounting for 67.69%. In 2008, the company signed a 20-year agreement with Yintai Department Store, entrusting the Hangzhou Department Store to Yintai Department Store management, collecting stable commissioned operating profits every year, providing a strong guarantee for long-term performance. The company's other operating income mainly comes from the operating income of Hangzhou Hotel and the rental income of Hangzhou collectibles market. In 2015, the revenue reached 69.7801 million yuan, accounting for 6.33% of the company's total revenue, and contributed profit of 17.3323 million yuan, accounting for 9.50%. It is expected that the two businesses will maintain steady revenue and profit growth in 2016.
The operation of the main business is sound, and high-quality properties provide a margin of safety.
The company's traditional business operation is sound, and its annual profits and cash flow income are stable. Its properties, including Hangzhou Department Store, Hangzhou Hotel and Xizi International Medical Center, are all located in prime locations in Hangzhou, with a conservative revaluation of about 9 billion yuan. the company's current market capitalization of 4.8 billion yuan has a high margin of safety. We believe that the company's own abundant funds will provide a solid foundation and strong guarantee for the development of a new medical and health service industry in the future.
Clear transformation of medical and health care, opening up new growth points of profits
The company has a clear strategy for the layout of the medical and health service industry, obtained the scarce license of medical institutions in private hospitals in 2015, signed a cooperation agreement with Zhejiang Cancer Hospital, obtained the license of Zhejiang Xizi International Medical Center, and located the accurate treatment center. reduced the operational risk of the new hospital. Together with Dean Diagnostics and Hangzhou Jiebai Investment, the company has set up Hangzhou full-process International Health and Medical Management Center Co., Ltd., and invested 100 million yuan to set up a wholly-owned subsidiary Zhejiang Baida Medical Industry Investment Co., Ltd. through cooperation with high-quality enterprises in the medical service segment industry, gradually enhance the core competitiveness in the medical field. In addition, the company set up a wholly-owned subsidiary in Hong Kong in early 2016, and some of the Group's industries have the background of Fortune 500 joint ventures. In the future, it may seek overseas cooperation, integrate high-quality resources, and achieve the extension of a large healthy industrial chain.
Third, profit forecast and investment suggestions
The company's department store business is stable, high-quality assets provide a margin of safety, and the company has accelerated the integration of technology and human resources in the medical field in recent years. There are broad prospects for the development of the medical and health industry, and we are optimistic about the company's transformation to the health service industry. It is estimated that the EPS from 2016 to 2018 will be 0.41 yuan, 0.46 yuan and 0.56 yuan, maintaining the "highly recommended" rating.
Fourth, risk tips: macroeconomic downturn, terminal demand is not up to date, transformation projects are lower than expected.