Main points of the report

Event description

Changjiang Investment released its three-quarter report for 2013. during the reporting period, the company achieved operating income of 1.168 billion yuan, an increase of 48.50% over the same period last year, of which revenue in the third quarter was 381 million yuan, an increase of 28.69% over the same period last year. From January to September, the operating cost was 683 million yuan, an increase of 51.79% over the same period last year, of which 327 million yuan was spent in the third quarter, an increase of 24.92% over the same period last year. In the first three quarters of 2013, the company realized a net profit attributable to the company of 35 million yuan, an increase of 45.47 percent over the same period last year. The basic EPS in the first three quarters was 0.114 yuan, compared with 0.0784 yuan in the same period last year. The net profit attributed to the parent company in the third quarter was 15 million yuan, an increase of 110 percent over the same period last year, and the EPS in a single quarter was 0.05 yuan.

Event comment

Project settlement declined, and revenue growth declined in a single quarter: although the company relied on engineering settlement, with revenue growth of 60% in the first two quarters of this year, revenue growth began to decline significantly in the third quarter compared with the same period last year, and was even more negative compared with the previous quarter. In the third quarter alone, the growth rate was only 28% compared with the same period last year, which we believe is mainly caused by the decline in project settlement. The growth range of 20-30% is basically contributed by the logistics business.

Project settlement continued to decrease, and traditional logistics was difficult to support the great cause: from January to September, the operating cost was 683 million yuan, an increase of 51.79% over the same period last year; of which, 327 million yuan was spent in the third quarter, an increase of 24.92% over the same period last year. From the perspective of the third quarter, the gross profit margin also showed a small improvement in the single quarter. We believe that the continued decline in engineering business resulted in negative quarter-on-quarter revenue growth in the third quarter. Logistics business still does not see much improvement, the current model, profits and so on are not yet mature.

The improvement of the three fees is not obvious, and the non-operating income supports the growth of the performance in a single quarter: the company has better control of the three fees in the first half of the year, but did not continue in the third quarter, and the rate of the three expenses in the third quarter is the same as that of last year. In terms of operating profit, the company's operating profit in the first three quarters of this year was 23 million, only an increase of 1 million over last year. The 4 million increase in non-operating income from last year largely explains all EPS growth, which is the only reason for the 100% increase in third-quarter results.

The dream of information logistics is still in the construction stage and relies on traditional industries to support performance and maintain "cautious recommendation": this year, the "56 Cloud platform" served by Lujiao Center for small and medium-sized enterprises has been officially put into operation. Although there is customer growth, but this is the performance starting from 0, the low base effect has not yet passed, sustained high growth is the focus. At present, the project-based profit structure reflected in the company's report still shows that the logistics business is still in the dream construction stage. We believe that diversification will add more highlights to the company's business, but continuous service and profitability can not be verified at present. We maintain the rating of "cautious recommendation" and estimate that the company's EPS will be 0.125 yuan 0.138 and 0.146 yuan from 2013 to 2015.