I. Overview of events
The company released its semi-annual report for 2017. during the reporting period, the company achieved operating income of 346 million yuan, down 12.7% from the same period last year, and deducted 163000 yuan from non-return net profit, down 98.66% from the same period last year.
II. Analysis and judgment
Dragged down by the loss business, the first half of the year's net profit fell by 98.66% compared with the same period last year. During the reporting period, the company's forestry sector achieved operating income of 19.7689 million yuan, a slight increase of 5.02% over the same period last year. Revenue from forest products processing business was 215.1084 million yuan, down 2.01% from the same period last year. Revenue from tobacco and chemical fertilizer trade was 53.9889 million yuan, down 35.39% from the same period last year. The concrete business was 40.0894 million yuan, down 35.35% from the same period last year. The sharp decline in company profits is mainly due to a sharp decline in revenue from trade circulation business and concrete business.
The supporting places for fund-raising projects have been put online one after another, and the management fees have all risen. During the reporting period, the company's three fees all increased, of which the sales expenses increased by 1.93% over the same period last year, and the management expenses increased by 12.74% compared with the same period last year. The company's fund-raising project "Pingtan Strait Medical Park Construction Project (Phase I)" has led to a substantial increase in management costs. Financial expenses increased by 156.22% compared with the same period last year. The sharp increase in financial expenses was mainly due to the reduction of interest income in the current period of raising funds for financial management.
With the divestiture of the concrete business, the company has gradually transformed the tourism, medical and financial fields. In recent years, due to the intensified competition in the concrete industry and the rising prices of raw materials, the profits of the concrete business have declined. In order to enhance the profitability of the company's assets, the company began to gradually divest the concrete business. The company seizes the market opportunity, makes full use of the policy dividend, focuses on the distribution of tourism and medical fields, and strives to realize the mutual promotion and coordinated development of various business sections: (1) the company quickly cuts into the leisure and vacation industry through mergers and acquisitions of mature tourism projects. accelerate the company's layout in the tourism industry and help the company achieve strategic transformation (2) the company not only enjoys the relevant preferential policies of Pingtan Comprehensive Experimental Zone, but also can better connect with international advanced medical technology through the establishment of subsidiary Zhongfudexin (Pingtan) in cooperation with Taiwan enterprises. to achieve a breakthrough in the medical field. (3) through investment, the company sets up a wholly-owned subsidiary Zhongfu Strait (Pingtan) Financial Control Group Co., Ltd. to provide financial services to accelerate the company's layout in the financial industry and create new profit growth points for the company.
Third, profit forecast and investment suggestions
The company will gradually peel off the lossmaking concrete business and transform the tourism, medical and financial sectors, and its asset profitability will be significantly enhanced. It is estimated that the company's EPS will be 0.07,0.13,0.15 yuan respectively from 2017 to 2019, corresponding to PE of 81.0,44.7,38.4 times. In the next 12 months, the reasonable valuation range will be 7.13-11.16 yuan.
Fourth, risk tips:
The schedule of the fund-raising project is not up to expectation, bad weather and natural disasters, the risk of policy change, etc.