Event: the company released its annual report: revenue in 2015 was 473 million yuan, up 16.64 percent over the same period last year; operating profit was 29.2638 million yuan, up 25.35 percent over the same period last year; net profit was 15.0335 million yuan, down 17.30 percent from the same period last year; and 19.0368 million yuan was deducted from non-return net profit, an increase of 28.61 percent over the same period last year and basic earnings per share of 0.03 yuan.
Main points of investment:
Positive transformation leads to rapid growth of income
1) the company actively develops mid-and high-end car crankshaft products to adjust the product structure (the average price increases by 7.35%), and actively expands new customers, supplying Guangzhou Auto, BAIC Yinxiang and Dongan Mitsubishi in bulk during the reporting period. And develop Changan Suzuki, Changhe Suzuki, Yunnei Power, BAIC Foton and other new customers. These two factors contributed to the rapid growth of the company's revenue in the context of depressed car sales. 2) the new relocation cost of Jinhong crankshaft production line and the rapid increase of costs caused by a large number of projects under construction, and the high base of non-operating income caused by Echai Hongxiang's debt exemption of 9.33 million yuan in 2014 led to a decline in net profit. However, the rapid growth of net profit after deduction is in line with our expectations. 3) as the Jinhong crankshaft has been relocated and the "crankshaft production line" has been successfully put into production, we expect that it is a high probability event that the "crankshaft production line" will pass the acceptance and get the real estate certificate and injected into the listed company this year. In the case of the company's active layout of high-end crankshafts and the expansion of new customers, the main performance is expected to continue to improve. At the same time, this year, the company proposed to "actively seek new economic growth points." Strive to explore the establishment of mutually beneficial strategic alliances, investment, joint ventures, mergers and acquisitions opportunities, refine and strengthen the main business ", is expected to further improve the overall profitability of the company.
The focus of capital operation remains the same.
1) the major shareholder Haowu has excellent qualification of mechanical and electrical assets. In addition to benefiting from the development and growth of the controlling shareholder property Group, the company may become the capital platform for the securitization of the automotive electromechanical plate of the property group; 2) according to public information, the company will focus on the automobile post-service market, expand the company's main business by means of mergers and acquisitions, cultivate new industries and increase new profit growth points. Together with Binkai Investment, Zhuolang Technology and Huixin Chuangfu, the company has initiated the establishment of a technology-based SME venture capital fund-Tianjin Fortune Jiaji Investment Partnership (limited partnership). From the operating data, it is expected that the investment project may have started. This will help to expand the company's main business and provide new performance growth points. 3) at present, the two shareholders of Xinjiang Silicon Valley Paradise have become related parties and signed the Strategic Consulting and M & An Integration Service Agreement, which is conducive to closer cooperation between the company and Xinjiang Silicon Valley Paradise in the future. To sum up, we believe that with the support of joint venture capital funds and Silicon Valley Paradise, future companies will carry out mergers and acquisitions and expand their main business around the post-service market in order to achieve great-leap-forward development.
Keep the profit forecast unchanged and maintain the "overweight" rating
We believe that the marketization of executive compensation incentive mechanism (linked to ROE and market capitalization) plays an important role in enhancing the enthusiasm of senior executives and improving the performance of the company. From the rapid growth of the company's revenue last year, we can see that the company is gradually on the right track. We raise our profit forecast: the company is expected to achieve operating income of 5.70 yuan 7.18 / 934 million yuan in 2016-18, an increase of 20.61% over the same period last year. The net profit of return to the mother is 0.29max 0.36 / 51 million CNY, an increase of 94.12Universe 22.97pm 41.95% over the same period last year, and the corresponding EPS is 0.11 CNY per share, respectively. It is recommended that you keep paying close attention to the "overweight" rating.
Risk tips: mass production of new products and new market development are lower than expected; cost growth during the period is higher than expected; national reform and capital operation progress is lower than expected.
