Main points of investment
Company announcement / News: the company announced its report for the third quarter of 2014, during the reporting period, the company's operating income increased by-10.34% to 39.4843 million yuan, the net profit belonging to shareholders of listed companies increased by-12.99% to 11.9245 million yuan, and the deducted non-net profit belonging to shareholders of listed companies increased by 2.90% to 11.947 million yuan. In the first and third quarters of 2014, the cumulative operating income was 135 million yuan, the attributable net profit was 35.7463 million yuan, and the attributable non-net profit was 35.6159 million yuan, up 7.03%,-14.79% and-12.25% respectively over the same period last year.
The performance was in line with expectations, and the Yangzhou subsidiary drove revenue growth as scheduled. (1) the company achieved a net attributable profit of 11.9245 million yuan in the third quarter of 2014, and a cumulative attributable net profit of 35.7463 million yuan in the first three quarters. The company's performance is basically in line with our previous expectations (our forward-looking performance forecast of October 17, 2014 is 37.19 million yuan, with an error of 3.88%). (2) after the first phase of the third phase project in Zhuhai reservoir area was put into operation, the increase in depreciation led to an increase in operating costs, and at the same time, due to the intensification of competition, the income level in Zhuhai decreased slightly.
The report of the parent company shows that the operating income decreased to 79.2751 million yuan from 82.5318 million yuan in the same period in 2013, but due to the continuous improvement of capacity utilization of Yangzhou subsidiary, the company reported that its operating income rose from 126 million yuan to 135 million yuan.
Yangzhou and Wuhan projects under construction are progressing steadily, and the recent transformation of venture capital investment in Luxin will be more smooth. (1) during the reporting period, the balance of the company's projects under construction increased by 303.71% to 64.3177 million yuan over the same period last year, and the prepaid account increased by 78.41% to 13.7452 million yuan, respectively, as a result of the steady progress of the Yangzhou Phase I extension (II) project and the Wuhan warehousing project. (2) through the announcement of the company's investment, Luxin Venture holding subsidiary plans to contribute 37.45 million yuan to participate in the company's non-public offering of A-shares and subscribe for 5 million shares of Henderson Daxin at 7.49 yuan per share, accounting for 1.85% of the company's total share capital after the completion of the non-public offering. We believe that the investment of Luxin Venture Capital in the company will help the company transform to LNG logistics.
Maintain the profit forecast for 2014-2016 and reiterate the "overweight" rating. We maintain the profit forecast of 54 million yuan, 65 million yuan and 67 million yuan for 2014-2016 (not considering the profit contribution of investment cooperation projects and projects under construction for the time being), and the corresponding fully diluted EPS is 0.22,0.27,0.28 yuan. If we consider investment cooperation projects and projects under construction, the company's net profit will be greatly increased in the next two years. The PE corresponding to the latest stock price is 51.2X, 41.7X and 40.2X respectively. Considering the company's positive prospects for the next three years after this non-public offering and the catalyst for oil and gas reform, we reiterate our "overweight" rating.