Event: the company released three quarterly reports, with a total operating income of 1.074 billion yuan in the first three quarters, an increase of 196.2% over the same period last year, and a net profit of 9.567 million yuan, down 2.4% from the same period last year. At the same time, the company expects to achieve a net profit of 20.55 million-24.66 million yuan in 2016, an increase of 50% to 80% over the same period last year.
The continuous layout of the clean energy industry chain is expected to achieve high growth in the future. Since entering the clean energy industry in 2013, the company has made a continuous layout. In 2015, the company acquired 51 per cent stakes in Yulin Jinyuan, Mizhi Luyuan and Yulin Logistics, which are owned by Shaanxi Luyuan, and acquired two LNG plants (with a total production capacity of 400000 tons) and four LNG filling station projects. The fixed increase was completed in June 2016, raising a total of 762 million yuan for the "400000 tons of clean energy project in Pengshan County", including 400000 tons of LNG plant and 30,000 LNG peak-shaving storage tanks, mainly used for urban emergency peak shaving, LNG vehicles and civil natural gas. It is expected to be put into production in 2018, with an annual net profit of 240 million yuan. The company has gradually completed the transformation and development strategy of "upstream LNG factory-mid-stream LNG logistics-downstream LNG distribution". With the gradual launch of production capacity, it is expected to achieve rapid growth in the field of clean energy in the future. In addition, Shengda Group, a major shareholder, completed an increase of about 30 million yuan in September 2016, demonstrating its confidence in the future development of the company.
Rising oil prices and the popularity of LNG cars are good for the clean energy business. The continuous downturn of international oil prices in the past two years has suppressed the downstream demand for LNG. With the gradual upward movement of the crude oil price center, the performance-to-price ratio of LNG will gradually improve, which is good for the LNG plate. In addition, Sichuan and other regions are actively promoting LNG vehicles, promoting the construction of LNG filling stations and building a network of LNG filling stations, which will benefit the company by relying on rich natural gas sources and a complete supply chain. The company's LNG business revenue in the first three quarters of this year is about 800 million, which is expected to exceed 1 billion yuan for the whole year, a 10-fold increase over the same period last year.
Continue to spin off the less profitable traditional business, and actively layout smart Internet homes. The company has stripped off the fibreboard business with poor profits, integrated and upgraded the original wood flooring and door cabinet business, adopted "Internet +" thinking to integrate online and offline channels, and created a "smart everyone" strategy, which is very consistent with the development direction of the future smart home market. In addition, the company, in cooperation with Shannan Datong, has launched a smart Internet home industry M & A fund, which will strongly support the company to carry out extension mergers and acquisitions in related fields.
Profit forecast and investment advice. It is estimated that the EPS from 2016 to 2018 is 0.04,0.07,0.11 yuan respectively, and the corresponding dynamic PE is 257,141,82 times. Cover for the first time, giving a "buy" rating.
Risk hints: the risk of intensified competition, the risk of large fluctuations in international crude oil prices, the risk that project construction is not as expected, and the risk that the promotion of LNG automobile industry is not as expected.