Event: the company achieved an operating income of 1.2 billion yuan in the first half of 2017, an increase of 112% over the same period last year, and a net profit of 150 million yuan, an increase of 53% over the same period last year. The substantial improvement in the company's performance is mainly due to the release of the performance of Guosheng Securities. We believe that the main marginal changes of the company in the first half of the year include: (1) the completion of the capital increase and restructuring of Guosheng Securities, and the increase in operating income by 49% compared with the same period last year; (2) the establishment of three new technology companies by the company. Build technology finance in an all-round way; and (3) carry out in-depth cooperation with Chu in trust by stages.
The capital increase and restructuring was successfully completed and the performance of Guosheng Securities was released. In the first half of 2017, Guosheng Securities achieved operating income of 600 million yuan, up 49% from the same period last year, and its revenue share rose to 49% from 33% in the same period last year. By the end of the reporting period, Guosheng Securities has 244 business outlets, achieving a national layout, which is conducive to its business expansion. We think. The main reasons for the substantial increase in the performance of Guosheng Securities are as follows: (1) in terms of brokerage business, the stock base trading volume of Guosheng Securities during the reporting period reached 217.8 billion yuan, the market share reached 0.4%, and the operating income reached 230 million yuan, an increase of 160% over the same period last year. (2) in terms of credit business, the balance of margin trading of Guosheng Securities reached 2 billion yuan at the end of June 2017, the market share reached 0.2%, and the interest income reached 300 million yuan, an increase of 262% over the same period last year. (3) in terms of investment banking business, Guosheng Securities successfully completed 100 million yuan of bond underwriting during the reporting period, with an operating income of 11.26 million yuan, an increase of 27% over the same period last year. During the reporting period, the company added 1.9 billion yuan to Guosheng Securities to further improve its net capital level, and successfully reorganized its board of directors and board of supervisors to enrich the management team. Guosheng Securities performance is expected to continue to release quickly.
Equity participation is divided into stages and the layout of diversified finance. The company transferred a 5% stake in Beijing Happy Times (fun stages) in November 2016. The company turned losses into profits in 2016, with a net profit of 160 million yuan. We believe that the rapid development of interest stages will bring additional support to the company's performance. The company announced its participation in the establishment of an Internet small loan company in November 2016, which is expected to achieve business coordination with interest stages. During the reporting period, the company and the company conducted in-depth cooperation in trust. In addition, the company carries on RMB and foreign currency equity investment management business through wholly-owned subsidiaries Shenzhen Huasheng and Huasheng Hong Kong respectively. It is expected that the company will continue to make full use of the equity investment business opportunities in China's Internet and financial fields, actively seek synergy and achieve extension expansion.
Set up three technology companies to build science and technology finance in an all-round way. During the reporting period, the company set up Zhuhai Hengqin Jisheng Technology Co., Ltd., relying on its financial technology plate operation. By the end of the interim report, Jisheng Technology has started the construction of core teams to promote securities IT system testing and independent R & D platform construction. In addition, the company established Tianjin Guosheng Internet Technology Co., Ltd. and Beijing Guosheng Internet Information Consulting Co., Ltd. in June 2017, engaged in computer network technology, electronic information technology, data processing technology development business and economic and trade consulting and enterprise management consulting business respectively. We believe that the three newly established technology companies will enhance the company's strength in technology finance and help the company develop into an Internet financial control platform.
Successfully sell the cable business and concentrate resources on finance. In the first half of 2017, the company's cable business achieved operating income of 600 million yuan, accounting for 51% of the company, down from 67% in the same period last year. On June 30, 2017, the company sold 100% of Huasheng Industrial. In the future, the company will no longer engage in cable business and focus on finance.
Investment suggestion: buy-An investment rating, the company's EPS for 2016-2018 is expected to be 0.42,0.55 and 0.70 yuan, with a 6-month target price of 34.41 yuan.
Risk tips: market risk, policy risk, operational risk