Event 1: the company released its 2012 report, with operating income of 1.614 billion yuan during the reporting period, a decrease of 2.88% over the same period last year; total profit. 57 million yuan, down 67.46% from the same period last year; the net profit belonging to the owner of the parent company was 45 million yuan, down 68.60% from the same period last year, and diluted earnings per share was 0.08 yuan, which was lower than we had expected. Event 2: it is proposed to invest 41 million yuan to set up a drone manufacturing company in a joint venture with Zhang Fusheng, a senior engineer of Zhuhai Xingyu Aviation Technology Co., Ltd., with 82% of the company. Event 3: it is proposed to invest 56 million yuan to set up an aero-engine manufacturing company in a joint venture with the Institute of Engineering Thermophysics of the Chinese Academy of Sciences. Comments: the sharp rise in three fees increases the company's costs, and the increase in asset impairment losses makes the company's performance even worse. Due to the overall downturn of the coal machinery industry in 2012, the company increased sales, developed new products, and increased financing, resulting in a 26.86% increase in the company's three expenses compared with the same period last year; in addition, the delayed payment of transfer funds from the Baishupo Coal Mine in Inner Mongolia led to a substantial provision for asset impairment, and the asset impairment loss increased by 513.27% compared with the same period last year. Considering that the government subsidy led to an increase of 308.74% in the company's non-operating income, the net profit after deducting non-recurring profits and losses was only 21.6249 million yuan, a sharp drop of 84.3%, indicating that companies with small and medium-sized coal enterprises as their main customers have been greatly affected. Under the background of insufficient demand for coal and shrinking investment plans of coal mining enterprises, we expect that the coal machinery industry will still be in a difficult situation in 2013, and the company will face greater challenges.
Enter the aviation field, actively seek transformation, but the uncertainty is very strong. According to the public information (company website) of Zhuhai Xingyu Aviation Technology Co., Ltd., Zhuhai Xingyu Aviation Technology Co., Ltd. already has the manufacturing technology of many models of small UAVs. if it can proceed smoothly, it is more likely to complete the construction target of five UAV platforms and complete the first flight test by the end of 2013 according to the company's expectation. In addition, the aero-engine to be developed by the company in a joint venture with the Institute of Engineering Thermophysics of the Chinese Academy of Sciences is mainly equipped with a certain type of UAV, so it is impossible to judge the prospect of the project. We believe that under the depressed situation of the coal machinery industry, the company plans to invest 97 million yuan to enter the field of UAV and aero-engine manufacturing, which is a relatively big transformation attempt, but the future uncertainty is very strong.
Earnings forecast: in view of the pessimistic expectations for the coal machinery industry and regardless of the impact of drones and aero-engines, we lowered the company's earnings forecast to 0.16 (- 53%), 0.19 (- 55%) and 0.23 yuan per share for 13-15, respectively. Maintain the company's "overweight" rating.
Risk factors: coal prices continue to fall; drone project progress is lower than expected.
