This report is read as follows:
We expect that the company's follow-up strategy will continue to expand along the pharmaceutical field, reducing leverage in traditional industries, providing flexibility in the financial sector, while benefiting from the normalization of environmental protection, the revitalization of the Northeast, and the improvement of building materials business.
Main points of investment:
Maintain the "overweight" rating. We maintain the forecast of 2017-2018 EPS0.17 of 0.23 yuan, maintain the target price of 8.22 yuan (corresponding to 48 times PE in 17 years), and maintain the "overweight" rating.
The new stage of shift of industrial structure. We believe that the company's gear shift has entered the fast lane, a new round of fixed growth has been completed, the proportion of state-owned assets holding has been further reduced to less than 10%, the company's financial leverage ratio has been reduced, and the layout of the pharmaceutical sector has begun to show a pattern; at the same time, benefiting from supply-side reform and normalization of environmental protection, traditional cement business may tend to improve under the background of stricter environmental protection.
Traditional industries tend to improve and gradually deleverage. The economic growth rate of the northeast region is at the end of the country in recent years, and the relevant support and revitalization policies are expected to hit the ground next year, and infrastructure demand is expected to improve. At the same time, off-peak production and environmental protection standards and inspections are stricter, the elimination of backward production capacity is expected to accelerate, and the pattern of cement supply and demand may tend to improve. Real estate as the main sector of the company's debt growth after 2009, the strategy has changed to deleveraging, and we have observed that real estate projects have been transferred and first-tier land has been sold in the second half of 2016.
Construction of Pharmaceutical-Circulation-Retail Pharmaceutical new business type: the company has completed the fixed increase with the pharmaceutical field as the main direction, aiming to build a pharmaceutical R & D industrial park and a production base for general medicine and health products, and to open up circulation links. In addition, relying on the strong influence of Jilin Pharmacy in the province, the laying speed of stores will be rapidly enhanced, and new models of telemedicine and pharmaceutical e-commerce will be explored step by step to achieve retail coverage.
Holding brokerage + shareholding bank, with high flexibility: the company holds 30.81% of the equity of Northeast Securities and is the controlling shareholder. It holds 700 million shares of Jilin Bank, accounting for 9.96% of the total share capital, making it the third largest shareholder.
Risk hint: domestic currency, real estate macro policy risk.