Investment highlights:
The performance fell short of market expectations.
In the first three quarters of 2014, the company achieved operating income of 49,02662 million yuan, an increase of 4.35% over the previous year; realized net profit attributable to shareholders of listed companies of 34.877 million yuan, an increase of 0.86% over the previous year; diluted earnings per share were 0.18 yuan/share. The third quarter achieved operating income of 123,32.1 million yuan in a single quarter, a year-on-year decrease of 21.02 percent; net profit attributable to shareholders of listed companies was 9.714,500 yuan, a year-on-year decrease of 28.45%; at the same time, revenue and profit indicators declined month-on-month due to seasonal factors, and overall performance was slightly lower than our previous expectations.
At the end of the peak cycle of production expansion, industry growth stabilized.
In 2013, the investment level of the company's direct downstream market - the tire manufacturing industry bottomed out and rebounded rapidly, and China's tire market also showed a strong trend of production and sales. Driven by this, global rubber machinery sales all achieved significant growth. In 2014, as market competition intensified, the tire industry began to enter a situation where “prices fall, increasing production is easy and revenue is difficult to increase”. As the peak subsides, the speed of capacity expansion will become normal, and this will drive the rubber machine industry, including Saixiang Technology, into a steady growth channel.
The product structure continues to improve, fine management and effectively control costs.
The company's main products include molding equipment, extrusion equipment, cutting equipment, steel wire ring winding equipment, and testing equipment. Due to objective differences in production process and manufacturing difficulty, molding machine products are the products with the highest stand-alone price and gross margin level among related equipment. With the recovery of demand in the downstream tire manufacturing industry, the company has taken greater initiative in the process of optimizing the product structure, and the proportion of molding machines in the product structure continues to increase. At the same time, in response to the characteristics of market-based production and product customization, the company formed a cost control mechanism in a structured and institutionalized manner through measures such as optimizing component selection, rationally allocating the volume of outsourced processing, and strengthening the orderly connection between all aspects of the supply chain and design and production services, which promoted the steady improvement of the company's product production efficiency.
Profit forecasts and investment recommendations.
It is expected that in 2014-2016, the company will achieve net profit of 70 million yuan, 86 million yuan and 99 million yuan respectively, up 45.44%, 22.93% and 15.27% respectively over the previous year. Corresponding to the full dilution of EPS was 0.35 yuan, 0.44 yuan and 0.50 yuan respectively, taking into account the company's main business performance and ability to expand, and raise the company's rating to “buy”
