Summary of the report:
Performance summary: in the first half of 2017, the company achieved operating income of 657 million yuan, an increase of 2.25% over the same period last year; the net profit attributable to shareholders was-15 million yuan, down 240.52% from the same period last year.
Divest the loss-making building materials business, and show thickening performance. During the reporting period, the company's revenue increased slightly, of which the revenue from the integrated circuit testing business reached 160 million yuan, an increase of 299.7% over the same period last year, mainly due to the company's acquisition of a 100% stake in Aiko Semiconductor in June 2016 and only 40 million yuan in June income; the real estate business achieved revenue of 236 million yuan, down 9.7% from the same period last year, and the real estate business is still in the inventory cycle. The revenue of trade, logistics and service business reached 227 million yuan, down 16.92% from the same period last year, mainly due to the impact of business structure adjustment.
Ecco Semiconductor combined with a significant increase in gross profit margin. In the first half of 2017, the company's overall gross profit margin was 22.54%, an increase of 6.05% over the same period last year, mainly due to the total revenue of Aiko Semiconductor. Its integrated circuit testing business had a high added value, with a gross profit margin of 54.9%, which greatly increased the company's gross profit margin. In addition, the gross profit margin of the company's real estate business was 15.5%, down 5.36 percentage points from the same period last year, mainly because the company's real estate business is still under the influence of the inventory cycle.
The transformational integrated circuit industry is expected to boost performance. With the divestiture of the loss-making business, on the one hand, it will improve management efficiency and operational efficiency, on the other hand, it will be able to focus on transforming the semiconductor industry chain.
The global semiconductor manufacturing industry has been transferred to China, and the development prospect is good. The revenue of Aike Semiconductor, which the company acquired, increased by 17.95% in the first half of this year compared with the same period last year, and the integrated circuit testing business has high added value. With the release of production capacity of the Shanghai Ai project raised in May, the company's operating performance is expected to achieve a qualitative improvement.
Profit forecast and rating: it is estimated that the growth rate of net profit from 2017 to 2019 is 59%, 47% and 48%, respectively, and the EPS is 0.11, 0.17 and 0.25 yuan, respectively.
Risk hint: the real estate market in Zhenjiang is in the doldrums, and the development of Aike Semiconductor is not as expected.