In the first half of 2013, the company achieved operating income of 541 million yuan, down 12.11% from the same period last year; operating profit of 68.0488 million yuan, down 15.52% from the same period last year; net profit belonging to the owner of the parent company was 50.2186 million yuan, down 10.37% from the same period last year; and basic earnings per share was 0.11 yuan.

Fundamental description. The company focuses on quasi-finance as its core business, mainly engaged in guarantee, leasing, pawn, trade financing, portfolio financing, financing consulting, investment consulting and insurance brokerage and other businesses. Its holding subsidiaries are mainly engaged in domestic trade Xiangyi Jinlian (70%), Yuantai pawn (82%) and Xiangyide pawn (78.7%). The largest shareholder is Zhejiang Tobacco Investment Management Co., Ltd., with a shareholding ratio of 12.04%. The actual controller is Zhejiang Province, China National Tobacco Corporation. In the first half of the year, affected by the decline in economic growth, the company's revenue fell 12.11% compared with the same period last year, and net profit fell 10.37% to 50 million yuan. Among them, the income from commodity sales during the period was 419 million yuan, accounting for 90.26% of the total income, and the gross profit was 21 million yuan, accounting for 53.14% of the total gross profit; the real estate realized income was 18 million yuan, accounting for 3.79% of the total income, and the gross profit was 10 million yuan, accounting for 25.79% of the total gross profit. The revenue from terminal services is 8 million yuan, accounting for 1.64% of the total revenue, and the gross profit is 1 million yuan, accounting for 3.59% of the total gross profit.

During this period, the ability of cost control has declined. During the period, the company's expense rate was 11.37%, an increase of 0.06 percentage points over the same period last year. Among them, the sales expense rate was 2%, down 0.54% from the same period last year; the management expense rate was 9.3%, an increase of 0.24% over the same period last year; and the financial expense rate was 0.06%, an increase of 0.37% over the same period last year.

The potential risk is rising. During the reporting period, the company's loan assets totaled 1.196 billion yuan, of which normal assets were 1.872 billion yuan, accounting for 72.87%, and suspicious assets accounted for 26.69%, an increase of 4.77% over the beginning of the period, and the potential risk increased. The company's 2013 performance goal is to achieve a total operating income of more than 1.2 billion yuan, operating costs of about 950 million yuan, and three expenses of about 120 million yuan.

Profit forecast and investment rating. We expect the company's earnings per share from 2013 to 2014 to be 0.37 yuan and 0.48 yuan respectively. According to the company's latest closing price, the corresponding dynamic price-to-earnings ratio is 28 times and 22 times respectively, maintaining the "overweight" investment rating.

Risk hint. The risk of loan default.