Key points of investment
Incident: Yuexin Health released its 2017 semi-annual report on August 2. It achieved total revenue of 404 million yuan during the reporting period, an increase of 24.96% over the same period last year. Guimu's net profit was 12.2523 million yuan, an increase of 430.44% over the previous year. The net profit of non-return mothers was 2,985,500 yuan, an increase of 125.52% over the previous year. Basic earnings per share were $0.0144.
The company's main ceramic tile business is growing steadily. During the reporting period, the net cash flow from the company's building ceramics business activities was about 463.3887 million yuan, an increase of 52.55% over the previous year, and gross profit increased by 22.8 million yuan over the previous year. The increase in gross profit comes from the fact that the company still uses a sales strategy that extends the product price line to the larger mid-tier market. Sales volume increased 1,475,800 square meters over the same period last year, an increase of 31.93%. The company's main ceramic tile business has gradually escaped the downturn and unfavorable operation of the building ceramics industry since 2011, and its steady growth has laid a solid foundation for the transformation of the big health industry.
The company is steadily advancing the strategic transformation of the big health industry. The company has carried out extensive resource integration and business layout in the medical field, acquired medical institutions to build a “regional health complex”, and introduced overseas experience to strengthen its core competitiveness. On June 19, 2017, the board of directors reviewed and approved the plan. The company plans to acquire 100% of the shares of the three private hospitals of Sihong County Fenjinting Hospital Co., Ltd., Quanjiao Tongren Hospital Co., Ltd., and Jianchang County Hospital of Traditional Chinese Medicine Co., Ltd. By injecting high-quality assets and integrating resources, the company's profitability can be greatly enhanced. The company opened Yuexin General Clinic for high-end people in Shanghai, and strives to build the most influential international and unique medical institution in Shanghai and the whole country. The company cooperates with professional institutions such as Tufts University School of Medicine in the United States and the Shuanglian Nursing Center in Taiwan to hire domestic and foreign experts and high-end talents to enhance the company's strength in the field of medical care and old-age care. Beginning with the clear transformation and upgrading of the health-care integrated health industry in 2015, the company continued to increase the big health industry through internal and external extension, which is expected to grow and flourish in the future.
Profit prediction and risk rating: In the first half of 2017, while continuing to develop the original ceramic tile business, the company actively transformed the big health industry. The ceramic tile business, which is the main business, has grown steadily, becoming a strong backing for the company's transformation into the big health industry. The company further developed the health industry by integrating the terminal service chain, asset-light operation, and integrating overseas resources. Optimistic about the company's two-main business operating model after transformation, it is estimated that the 2017-2019 EPS will be 0.02/0.02/0.03 yuan respectively, maintaining the “increase in holdings” rating.
Risk warning: cooperation in the field of health fell short of expectations