Peace viewpoint:
Extension mergers and acquisitions of the medical and health industry, resulting in both revenue and profit growth:
During the three-year period from 2013 to 2015, due to the acquisition of high-quality assets in the medical and health sector, Zhongyuan shares achieved a compound increase of 39.5% in net profit from home, with operating income of 145 million yuan in the first half of 2016, an increase of 79.59% over the same period last year, and net profit of 31.3386 million yuan, up 170.41% over the same period last year. Non-net profit was 30.2388 million yuan, an increase of 162.89% over the same period last year.
The power grid business has won many bids for major projects, and the gross profit margin is higher than the industry average:
For the whole of 2015, Zhongyuan continued to maintain the market advantage of the main products in the power grid field, realized the operating income of 200 million yuan of power grid products, and won a series of major nuclear power and UHV projects. As of June 30, the new contract amount signed by the company in 2016 was 168 million yuan, an increase of 53.11% over the same period last year, and the outstanding contract amount was 240 million yuan, which better ensured the rapid growth of subsequent performance.
In terms of gross profit margin, the company's gross profit margin has been maintained at a high level, and the gross profit margin of the smart grid business in 2015 was 60.8%, which is higher than the industry average.
Epitaxial mergers and acquisitions, layout of medical and health business:
Since 2013, due to the layout of the medical and health field, Houshen has controlled Daqian Biology and Everson Biology, and acquired 100% shares of Shixuan Technology in 2015 by issuing shares (the share price is 11.67 yuan per share) and paying cash. The three have a certain degree of cooperation. In 2015, the revenue of the medical and health business accounted for about 26%, and the gross profit margin was 61.45%. Considering the factor that Shixuan Technology was incorporated into the consolidated statement in 2016, the medical and health sector will become the main performance growth point of the company in the future.
In addition, with the acquisition of Shixuan Technology, Xu Fuxuan and Fuduo promised that the net profit for 2015-2017 would not be less than 46.875 million yuan, 58.594 million yuan and 73.242 million yuan, and made special regulations on the lock of consideration shares subscribed by the two people on a regular basis. It can be seen that the company's shareholders' confidence in the future development of Shixuan technology. Investment advice:
The company has formed a business structure of smart grid and simultaneous development of health care and health, and its ability to resist market risks has been effectively improved, providing the company with a sound and reliable performance guarantee. We predict that the EPS in 2016, 2017 and 2018 will be 0.25,0.34,0.43 yuan respectively, and the corresponding PE will be 47.8,34.9 and 27.6 times, respectively. At the same time, the company does not rule out further mergers and acquisitions in the field of health care in the future, covering and giving a "recommended" rating for the first time.
Risk Tips:
The risk of volatility in the securities market, the risk of power grid policy change, the risk of integration of new industries, the policy risk of the medical and health industry, and the risk that Shixuan's performance commitment falls short of expectations (Shixuan's net profit in the first half of the year is 14.652 million yuan, the performance commitment for 2016 is 58.594 million yuan).