Net profit in 2017 increased by 11.5% year-on-year, better than expected
Haiyin shares announced its 2017 results: operating income was 2.56 billion yuan, up 28.5% over the same period last year; net profit belonging to the parent company was 230 million yuan, up 11.5% from the same period last year, corresponding to 0.10 yuan per share, which was better than our expectations. It is mainly driven by the rapid development of business in the real estate and financial sectors. From a quarterly point of view, Q1/Q2/Q3/Q4 revenue is-1.4% Universe 5.5% Universe 34% Universe 80%, and net profit is + 3% Plus 51% gamma 49% Universe 49% respectively.
Trend of development
1, real estate, financial business contribution increment, promote the rapid growth of the company's revenue. In 2017, the revenue of Haiyin shares increased by 28.47%, of which the revenue of commercial business increased by 29.95%, which was mainly driven by the substantial growth of real estate business (112% year-on-year growth, accounting for 27.7% of revenue). The revenue of the financial sector grew by 137%. Shanglian pay, Haiyin small loan and Heyuan Agricultural Bank have all achieved good development. As a result of the company's divestiture of its entertainment business, revenue from the culture sector fell 60% in 2017 compared with the same period last year. If this effect is not taken into account, the company's revenue growth is even stronger.
2. The gross profit margin has declined slightly, and the expense rate has improved. The gross profit margin of Haiyin shares fell by 0.3ppt to 38.5% in 2017 compared with the same period last year, in which property leasing and real estate projects declined slightly, while financial business declined significantly; during the period, the expense rate decreased by 0.9ppt to 21.1%, of which the sales / management expense rate was improved by 1.9ppt; the company provided for asset impairment of 31.36 million in the fourth quarter, mainly in preparation for inventory decline in Zhaoqing Dawang project and loan impairment in the financial sector. Taken together, the company's net interest rate fell 1.4ppt to 9.0%.
3. The growth of two-wheel drive companies in the future of business and finance. ① Haiyin takes its theme shopping malls, professional markets, shopping malls and urban complexes as the center, and its extension cuts into intelligent warehousing and logistics, industrial parks, hotels and other projects. "Dhaiyin" business platform is developing well; ② takes Haiyin Financial Control as the platform to launch factoring, Internet small loans, financial leasing and other diversified financial services, the financial industry is rich.
Profit forecast
We keep our earnings per share forecast unchanged in 2018 and introduce a profit forecast of 0.13 yuan per share in 2019.
Valuation and suggestion
The current share price of the company corresponds to 22 times the price of 2018 Universe, which is 25 debase in 1919. We maintain the recommended rating, but in view of the increased competition in the business sector of the company, we lowered the target price by 8.7% to 4.20 yuan, corresponding to 33 times Pram E in 2019, which is 52% upside from the current share price.
Risk.
Consumption is in the doldrums; competition in the industry has intensified.