Main points:
The company has completely spun off its real estate, non-ferrous metals and printer businesses. The company issued an announcement in September 2015, disposing of 100% of Shida Information, 23.5% of Changchun Rongchuang and 17% of Shida equipment, which was undertaken by Aung Zhan Real Estate or its designated third party. And issued an announcement on December 8, transferring 75% of Fujian Shida Electronics's equity and corresponding debts to Fuzhou Xindayu Trading Co., Ltd., so far, the company has completed the divestiture of all non-performing assets.
At the same time, the company issued a pre-earnings announcement in January 2016, which is expected to achieve a net profit of between 130 million yuan and 200 million yuan belonging to shareholders of listed companies. The divestiture of non-performing assets has laid a solid foundation for the complete transformation of the company in 2016. with the gradual clarity of the company's layout direction, we think that the benign and leapfrog development of the company in the future is worth looking forward to.
Major shareholders participated in raising about 1.2 billion of matching funds to acquire the manufacturer of Shenzhen Xingfei transformed mobile intelligent terminal products. In this M & A project, the company issued shares to all shareholders of Shenzhen Xingfei and paid cash to buy 100% equity of Shenzhen Xingfei; and raised 1.2 billion yuan of matching funds from the non-public offering shares of Onzhan Real Estate and Tianli No.2 to pay cash consideration and invest in the expansion of Shenzhen Xingfei's communication terminal production line, SMT patch line expansion, polymer lithium ion battery investment, East China R & D base and other projects.
Through this M & A, the shareholding proportion of major shareholders has increased significantly to nearly 40%, and the subsequent extension M & An and capital operation are expected. Major shareholder Onzhan Real Estate held 79 million shares before the acquisition of Shenzhen Xingfei, accounting for 22.51%, and about 38% after the completion of the transaction; at the same time, major shareholders took the initiative to increase their shares in the company in September 2015, indicating their confidence in the future development of the company. Combined with the management's expectation in the 2014 annual report that 2014-2016 will be the critical period of the company's transformation, we are optimistic about the possibility of the company's follow-up as a financing and capital operation platform, extension mergers and acquisitions and enriching the related industrial chain.
Profit forecast and investment rating. According to the January 8 announcement, the company transferred 100% of Fujian Shida Information Technology Co., Ltd. on December 31, 2015, and is expected to turn a loss into profit in 2015. Divestiture of non-performing assets as an indispensable part of this additional issuance and mergers and acquisitions, we believe that the completion of the company's additional issuance next year is a high probability event. Therefore, considering the additional issuance of the company, we expect that the diluted EPS of the company in 2015-2017 will be 0.47,0.22,0.25 yuan respectively, and the corresponding PE will be 36.5,78.8,69.1 times respectively. At the same time, combined with the company's investment in the smartphone ODM field and the possibility of future cross-industry chain extension, the company will be given an "overweight" rating for the first time.
Risk tips: 1) the transformation of the company is not as expected; 2) the time process of SEO implementation is uncertain risk; 3) market systemic risk.