Summary:

The controlling shareholder of Liaoning Chengda Group is Chengda Group, and Liaoning SASAC is the actual controller of the company. The company's business is divided into four business sectors: biopharmaceutical, trade circulation, energy development and financial investment.

The company has the highest proportion of income in the field of commodity circulation and continues to operate steadily. In addition, financial investment and biopharmaceutical business have become the bright spots of the company.

Liaoning Chengda holds 16.4% of GF Securities Co., LTD. 's shares, ranking firmly in GF Securities Co., LTD. 's top three shareholders. GF Securities Co., LTD. 's contribution to investment income accounts for more than 70% of Liaoning Chengda's total profits. GF Securities Co., LTD. 's comprehensive strength ranks in the forefront of the industry, with operating income and net profit in the top five of the domestic securities industry, and the investment income is in line with expectations. GF Securities Co., LTD. achieved an investment income of 1.319 billion yuan in 2016.

The main products of Chengda include human rabies vaccine, human Japanese encephalitis inactivated vaccine and veterinary rabies vaccine. The core technology owned by adult organisms, the vaccine produced by this technology has the characteristics of high price and low impurities, resulting in good immune effect and low incidence of adverse reactions. Adult human rabies vaccine has been firmly in the market share of about 50%, in the market leading position.

Profit forecast: the company's profits mainly come from the financial sector, GF Securities Co., LTD. accounts for the highest proportion of profits, and the profit contribution of China Insurance is increasing year by year. In addition, the company's diversified business has developed steadily, and the performance of biopharmaceutical has improved steadily. We predict that the EPS of the company from 2017 to 2019 will be 0.75 yuan, 0.79 yuan and 0.92 yuan respectively, giving the company an "overweight" rating for the first time.

Risk hints: 1) stock market risk; 2) macroeconomic operation is higher than expected; 3) fixed growth progress is lower than expected.