Event: the company issued the 2017 semi-annual report, the first half of the operating income of 6.4 billion yuan, an increase of 68% over the same period last year. The net profit attributed to shareholders of listed companies is about 870 million yuan, up 20% from the same period last year. Basic earnings per share is about 0.5673 yuan.
Comments:
Bulk trade turned from losses to profits, and the return on investment increased significantly. The sharp increase in revenue is due to a surge in revenue in the bulk trading sector and an increase in revenue in the biopharmaceutical sector. Although there were losses in the energy business and the net profit of China Insurance declined during the reporting period, the net profit increased steadily. The increase in net profit mainly comes from the equity transfer of Carrefour and the investment income of GF Securities Co., LTD. as well as the endogenous growth of the biopharmaceutical sector. However, in terms of biopharmaceuticals, Chengda Biology took the lead in establishing a cold chain logistics system, and achieved remarkable results in vaccine products, with an income of 590 million yuan (YoY24.7%) and a net profit of 260 million yuan (YoY10.5%). In terms of bulk trade, commodity prices are picking up this year, with the sector achieving an income of 4.25 billion yuan (YoY137%) and a net profit of 6.84 million yuan, with a stop-loss profit. In terms of energy, Baoming in Xinjiang achieved an income of 22 million yuan (YoY22.2%) and a net profit loss of 300 million yuan. In terms of finance, GF Securities Co., LTD. achieved a net profit of 4.3 billion yuan (YoY7.5%), an investment income of 710 million yuan (YoY7.3%), and a net profit of 640 million yuan (YoY-28.8%) and an investment income of 125 million yuan (YoY-50.4%).
The asset structure has been continuously optimized, and the strength of securities insurance is strong. The company reduces losses in its traditional business, its energy assets are for sale, and its asset structure is constantly optimized. On the financial front, GF Securities Co., LTD. and China Insurance are developing steadily and their overall valuation is on the low side. GF Securities Co., LTD. has abundant capital, rich projects and strong profitability, so he ranks among the best in the competition among securities firms. The scale of China's insurance market is in the forefront of the country, and its performance is better than the industry average in terms of property insurance. In terms of life insurance, the business continues to develop, and the potential is unlimited.
Investment suggestion: the company holds the full license of securities insurance, and the asset structure is constantly optimized. The value of the company has been on the low side for a long time, and it is imagined that the new shareholder Tehua invests at a premium. The fundamentals are getting better in the future, and development may meet major breakthroughs. Give the company a target price of 22.79 yuan and maintain a "buy" rating.
Risk Tip: the company's business development is not up to expectations
