Events:
On October 27, Dalian Shengya released three quarterly reports. In the first three quarters of 2017, the company achieved operating income of 305 million yuan / increase of 13.69%, attributable net profit of 90 million yuan / increase of 29.31%, non-attributable net profit of 90 million yuan / increase of 24.94%, and basic earnings per share of 0.9732 yuan / increase of 29.31%.
Q3 realized operating income of 173 million yuan / increase of 12.58%, attributable net profit of 83 million yuan / increase of 24.95%, and non-attributable net profit of 83 million yuan / increase of 24.42%.
Comments:
1, product marketing two-wheel drive, Q3 to achieve good growth on a high base. The company's revenue in the first three quarters increased by 13.7%, and the attributable net profit increased by 29.3%, which mainly benefited from improving the interaction and appreciation of products, strengthening marketing and publicity, and obtaining service income from light assets projects. The seasonality of the company's operation is very obvious. Q3, as a traditional peak season, achieved an increase of 12.6% in revenue and 25.0% in net profit attributable to a higher base, with a relatively strong performance, basically ensuring a good performance trend for the whole year.
2. The increase in loans has pushed up the financial expenses, and the overall profitability has improved significantly. In the first three quarters, the company's sales expense rate decreased 1.5pct, management expense rate increased 0.67pct, due to the increase in the average loan size, the financial expense rate increased 0.55pct, the overall cost control was stable. Benefiting from the expansion of business scale and the optimization of internal management, the company's gross profit margin rose sharply to 67.76%, the highest level in recent years, leading to a rise in net profit margin of 3.17pct.
3. The orderly progress of remote projects is expected to open up the space for growth. The domestic theme park market is in the ascendant, and remote projects are expected to help the company break through the geographical restrictions and open up the performance space. After Dingzeng failed, the company initiated the establishment of Dalian Shengya Panjing Fund with a total size of 3 billion yuan (of which the company contributed 25 million yuan) to guarantee project funds through a variety of financing channels. At present, the Zhenjiang, Sanya, Yingkou, Xiamen, Kunming and Qiandao Lake projects have all started, and the main structure of the Sanya project is capped. Zhenjiang, Sanya and Yingkou projects are expected to be put into operation in 2018, and the follow-up performance is worth looking forward to.
4. Investment suggestion: the domestic theme park market is in the stage of rapid growth and the prospect is good. The company has made some breakthroughs in its performance in the first three quarters, and many projects in different places have bloomed. Relying on management experience and technical advantages, it is expected to bring new growth points. We estimate that the EPS for 17-19 will be 0.68, 0.82 and 1.16 yuan, corresponding to the PE valuation of 36x/30x/21x, maintaining the "prudent recommendation-A" investment rating.
5. Risk factors: the opening of the project is not up to expectation, and the systemic risk of the tourism industry.