Main points of the report

Event description

Hartech (600095) announced today's 2015 report, the main contents are as follows: in 2015, the company achieved operating income of 265 million yuan, a decrease of 39.88% over the same period last year, a net profit of 14.5772 million yuan, an increase of 25.90% over the same period last year, and a net profit margin of 5.51%, up 2.88% from the same period last year, EPS0.04 yuan. Among them, the operating income in the fourth quarter was 104 million yuan, an increase of 38.01% over the same period last year, the net profit was 25 million yuan, an increase of 576.28% over the same period last year, and the net profit margin was 23.93%, up 19.05% from the same period last year, EPS0.07 yuan.

Event comment

The main businesses are dull, revenue declines and profits pick up. The company's 2015 operating income decreased by 39.88% compared with the same period last year, and its net profit increased by 25.90% year-on-year. The company's revenue decline is due to a certain decline in revenue from businesses such as real estate, pharmaceuticals and roll-proof materials compared with the previous year; the company's net profit has increased significantly this year, mainly due to a reduction of 20.06 million yuan in asset impairment losses caused by the company's recovery of receivables in 2015. Another main reason is that the subsidiary Qingdao Lingang Real Estate received a government construction land attachment demolition award of 19.76 million yuan.

The level of debt is low and there is more room for capital operation. The company's current period to strengthen the return of funds, resulting in plenty of cash, leaving more room for the company's capital operation. At the end of the reporting period, the company's asset-liability ratio was 34%, the lowest level in recent years, and the net debt ratio was low, only 4%.

The pharmaceutical industry has a stable performance and increased resistance to the real estate cycle. In 2015, while the operating income of the subsidiary White Swan Pharmaceutical Company decreased compared with last year, the net profit increased by 3.62 million yuan, mainly due to the growth of thymosin enteric net profit of the dominant variety with higher gross profit margin for four consecutive years.

The pharmaceutical industry accounted for 23.41% of total revenue in 2015, and net profit increased steadily, strengthening the company's resistance to the real estate cycle.

Continue to increase the size of new energy, waiting for the transformation to rise abruptly based on accumulated strength. During the reporting period, the company made continuous actions in the new energy business. In early June, the company provided financial assistance of 61.38 million yuan to Puni, and at the beginning of November the company issued a fixed increase plan to raise 1 billion yuan, of which 500 million will be invested in the design, consultation and construction of photovoltaic power station. With the continuous fermentation of the new energy macro policy and the gradual improvement of the Pune solar energy production line, the new energy business is expected to become a new growth point of the company.

Investment advice: the performance in 2015 is mediocre and is optimistic about the improvement in 2016. Considering that it is difficult to determine the cashing time of the new business performance, based on the existing traditional business operation, we estimate that the EPS in 2016 and 2017 will be 0.044 yuan and 0.054 yuan per share, respectively, and the corresponding share price will be 203.40 and 167.32 times PE, covering for the first time and giving "overweight" rating.

Risk hint: pharmaceutical industry regulation tightened, fixed increase plan blocked