Key points of investment
Incident: The company achieved revenue of 397 million yuan in the first half of 2016, a year-on-year decrease of 21.38%, a year-on-year net profit of 19.92 million yuan, a year-on-year decrease of 35.54%, after deducting non-net profit of 12.21 million yuan, a year-on-year decrease of 54.65%, and EPS was about 0.01 yuan/share.
Reviews:
The traditional forestry and timber industry is relatively stable, and the direction of transformation of tourism and medical care strategies is rapidly expanding. During the reporting period, the company's forestry/forest products processing/pawnbroking/concrete/trade distribution business revenue fell by 43.35%/6.13%/22/ 4%/1.73%/43.2% respectively. Furthermore, the increase in tourism medical project expansion expenses caused the company's net profit to drop sharply. The company is accelerating the layout and implementation of related projects. Medical aspects: the dental hospital Aiwei Clinic was established in January 2016. The operating conditions are good. The otolaryngology clinic is being prepared and will open soon. The rehabilitation hospital and aesthetic hospital will take the opportunity to start. The Fuzhou Sanjiangkou Hospital project and the Fujian Yanfu Memorial Hospital project are progressing as planned; in terms of tourism: the fund-raising project of the Pingtan Haitianfudi Beautiful Village and Leisure Resort Comprehensive Development Project is underway. Currently, the government is carrying out related demolition work; in addition, the company has signed a strategic framework for cooperation with the Pingtan Social Affairs Bureau The agreement is a framework agreement on the willingness of the two parties to cooperate. It mainly involves investment in equestrian sports and related industrial projects such as the Pingtan (International) Horse Culture Park, the Asia (Pingtan) Equestrian Sports Center, the Wuma Grand Theatre, and the Pingtan Horse Industry Free Trade Center (cross-border e-commerce).
Profit forecasts and investment ratings: Pingtan has a favorable combination of the three policies of a free trade zone & free port & maritime silk road. The free trade zone (the Pingtan area is 43 square kilometers, strategically positioned to focus on building a common home on both sides of the Strait and an international tourist island); free port (which has many policy dividends in terms of taxation, trade preferences, and the movement of people, and overcomes the free trade zone); the Maritime Silk Road (Pingtan is expected to become a window for the New Maritime Silk Road). The State Council has agreed in principle that the “Pingtan International Tourism Island Construction Plan” is the strategic positioning of the Pingtan Free Trade Zone The landing is being sought based on the experience of Hainan Island and Pingtan in the early stages The outlying island shopping tax exemption policy is expected to be tested in Pingtan; with the status of a listed company and the chairman's many years of experience in politics, it is expected to become a comprehensive developer of the Pingtan Comprehensive Experimental Zone and participate in the construction of the Pingtan International Tourist Island. Furthermore, the former horse racing sports center settled in Pingtan to plan and develop equestrian sports, issue horse racing sports lotteries, and develop horse racing sports. The company recently signed a “Strategic Cooperation Framework Agreement” with the Social Affairs Bureau of the Pingtan Comprehensive Experimental Zone. The two sides will rely on the regional advantages and policy advantages of the Pingtan Comprehensive Experimental Zone to fully develop their own advantages and in-depth equestrian development Sports and related horses The industry is expected to benefit from the development of the horse industry and Ma Cai in the future. EPS is expected to be 0.04/0.07/0.11 yuan respectively in 16-18, maintaining the “increase in holdings” rating.
Risk warning: The overall development of the Pingtan Experimental Zone fell short of expectations, and the progress of the company's projects fell short of expectations.