In 2010, the company achieved operating income of 5.478 billion yuan, an increase of 52.78% over the same period last year; operating profit of 284 million yuan, an increase of 14.73% over the same period last year; and the net profit of owners belonging to the parent company was 173 million yuan, an increase of 12.89% over the same period last year. In the fourth quarter, the company achieved operating income of 1.539 billion yuan, an increase of 8% over the previous quarter; the net profit of owners belonging to the parent company was 35.87 million yuan, down 17.22% from the previous quarter. 1.2 yuan for every 10 shares (including tax).
The three businesses go hand in hand and continue to strengthen the core business in 2011. The company's main business is transport and logistics services, auto parts manufacturing and car after-service, water tourism services. Against the background of the 2010 World Expo and car sales exceeding 18 million vehicles, the revenue of the three businesses increased by 16.44%, 85.16% and 29.49% respectively over the same period last year, accounting for 34.69%, 61.29% and 14.19% respectively; the gross profit margin was 17.1%, 11.35% and 29.49% respectively, and the gross profit accounted for 39.09%, 45.82% and 2.76%, respectively. During the "post-Expo" period in 2011, the company will continue to optimize and upgrade the industrial structure, especially to increase the integration and expansion of the core transport and logistics business. We expect the company to achieve 6.2 billion yuan in revenue in 2011, an increase of about 15% over the same period last year.
Directional additional issuance has become the listing platform for the core assets of the Transportation Group. The company has suspended trading since February 9, 2011, and resumed trading on March 18 to announce the private placement plan. The company plans to issue about 128.5 million shares to Transportation Group, Jiushi Company and Shanghai Real Estate Group at 7.26 yuan per share to acquire passenger transport and logistics business assets. Among them, Jiaoyun Group subscribed 78.5 million shares with its 100% stake in Shipping Hubei, 35% stake in Lingang Port Terminal and 200 million yuan in cash; Jiusi Company subscribed 40.9 million shares with its 48.5% stake in Transportation bus; Real Estate Group subscribed 9.1 million shares with its 25% stake in South Station. The planned purchase of assets will achieve a net profit of 56.29 million yuan belonging to the owner of the parent company in 2010. It is expected to be 65.34 million yuan in 2011, and according to the total share capital of 860 million shares after the issue, it is expected to increase EPS0.07 yuan in 2011. After the completion of the transaction, the strength of the company's logistics and passenger transport sector will be significantly enhanced, and the Transportation Group will achieve the overall listing of its core assets, with the shareholding ratio increasing from 49.18% to 51%. It will still be the controlling shareholder, and the Shanghai SASAC is still the actual controller.
Profit forecast and rating. Without considering the private placement, the EPS of the company from 2011 to 2013 is expected to be 0.28,0.34,0.41 yuan respectively. Based on the closing price of 7.69yuan on February 1st, the corresponding dynamic PE is 28 times, 23 times and 19 times respectively, maintaining the "overweight" rating.
Risk hint. (1) the progress of private placement is lower than the expected risk; (2) the income of automobile business is lower than the expected risk.
