Main points of investment:
The company publishes its semi-annual report for 2017. During the reporting period, the company achieved operating income of 679 million yuan, an increase of 1.02 times over the same period last year; net profit belonging to shareholders of listed companies was 21.88 million yuan, an increase of 1.01 times over the same period last year; and basic earnings per share was 0.06 yuan.
In the first half of 2017, driven by the increase in real estate carry-over (Yatong-Shuiyan Jingyuan commercial housing delivery confirmation), the company's revenue increased by 1.02 times, and the company's net profit increased by 1.01 times in the same period. From January to June 2017, the company's real estate business focused on the proper delivery and management services of "Yatong" Waterfront Landscape Court. At present, the company is reviewing the project price of "Yatong" Waterfront Jingyuan, and strives to be completed by the end of this year. In May this year, the company began to sell 618 underground parking spaces, and 256 parking spaces have been sold. At the same time, the company ensures the quality and quantity to promote the construction of the No. 2 plot. During the reporting period, the company seized the opportunity of Chongming to vigorously develop the cultural and sports tourism industry and actively looked for cooperation outside the island. Secondly, the company makes full use of land resources and invests in relatively mature modern breeding industry projects. The company continues to strengthen its ties with fund companies, investment institutions and securities firms, while making full use of the fund team's rich investment and financing experience and risk control ability to extensively select high-quality projects and reserve target resources for the company's transformation and development.
Investment advice. Benefit from the withdrawal of Chongming county into districts, when the transformation is carried out, maintain the "holding" rating. The company has diversified development and has always been the only listed company on Chongming Island. At present, the company's main business is not clear, temporarily mainly engaged in real estate development business. Since the 1990s, the company has experimented with ecological agriculture, high-tech agriculture and tourism, and has a total of 2500 mu of land for ecological agriculture. The development of Chongming Island is positioned as a modern ecological island. It is planned that by 2020, Chongming Island will gradually improve the development and construction of various regions and become a new island with the collection of international conferences, vacation and leisure, scientific and educational research and innovation, and new towns. Chongming will fully benefit from the withdrawal of counties and the establishment of districts. At present, the company has more than 20 shareholding subsidiaries, including investment, industrial operation, asset management and self-investment. It is estimated that the EPS of the company in 2017 and 2018 is 0.19 yuan and 0.30 yuan respectively. With reference to the comparable company's 2017 price-to-earnings ratio of 134 times, we give Yatong shares a price-to-earnings ratio of 90 times 2017 with a target price of 17.1 yuan to maintain the "overweight" rating.
Risk Tip: the company is facing the risk that the lease and sale is not as expected.