Peace viewpoint:
Solid performance, abundant cash flow and low asset-liability ratio:
In 2016, the company achieved an operating income of 2.067 billion yuan, an increase of 7.23% over the same period last year, and a net profit of 106 million yuan, an increase of 40.65% over the same period last year. In the first quarter of 2017, the operating income was 553 million yuan, an increase of 8.44 percent over the same period last year, and the net profit of returning home was 23.1141 million yuan, an increase of 19.39 percent over the same period last year.
In terms of cash flow, because the company is mainly engaged in book publishing and food cold chain, so the cash flow is abundant, the company has 960 million yuan in cash (including wealth management products) at the end of the first quarter, and the company has good credit and sufficient bank credit lines. At the same time, the company's asset-liability ratio has remained low, with a debt-to-asset ratio of only 26% at the end of the first quarter of 2017.
The speed of invigorating land resources may be accelerated:
The existing land situation of the company is as follows: (1) about 200mu of land in Tanzhou Town, Zhongshan, which was accounted for according to the evaluation and valuation of 50.88 million yuan during the asset reorganization in 2008, and the land use is industrial land. "three links and one flat" has been completed; (2) about 100 mu of land in Guangzhou Xicun Refrigeration Plant was accounted for according to the evaluation and valuation of 97.65 million yuan in 2008. The land use is industrial land, and the land is Guanghong food production and management land. (3) about 1200 mu of land in Shishan, Nanhai, Foshan, which is used for mountain forest, which is currently used for the production and operation of Nanhai Poultry Company; (4) 2680 square meters of land in Dali, Nanhai, Foshan, and the land use is commercial land, currently idle. (5) the Economic Building of Guangzhou Avenue North headquarters, with a construction land area of 5004 square meters, a land purchase cost of 40 million yuan, a planned total construction area of 29000 square meters and a height of 19 storeys. The project has been capped and is in the stage of decoration and construction. It is expected to be put into use in 2017. The record sheet of investor relations activities issued by the company makes it clear that "the activation of relevant land resources will be accelerated in the future."
To promote the "Food Cold chain Wisdom Port" project, the land of Xicun Refrigeration Plant is expected to be put on the agenda:
On June 12, 2017, Guanghong Food, a wholly owned subsidiary of the company, signed a letter of intent with Guangzhou Shijing cement Plant and Guangzhou Changxian Real Estate on a land area of about 200 mu in Shijing Town, Shijing Town, Baiwu District to develop the "Food Cold chain Wisdom Port" project. Letter of intent for Cooperation
Valid for 8 months, we expect the project to start soon, and the land renovation of Xicun Refrigeration Plant is expected to be put on the agenda.
Investment advice:
It is estimated that the EPS of Guanghong Holdings in 2017, 2018 and 2019 is 0.23,0.27,0.32 yuan respectively, and the corresponding PE is 41.9x, 35.3x and 29.3x respectively. At the same time, the company has extension expectations, and taking into account Guangdong-Hong Kong-Macau Greater Bay Area construction, land resources activation and other factors, we maintain a "recommended" rating to the company.
Risk hint
The risk of land resource activation is not up to expectation, the risk of extension transformation is not up to expectation, and the risk of performance damage caused by factory relocation.
