Brief comments on the results of the three Quarterly reports:
According to the company's three-quarter report, the operating income in the first half of this year was 11.047 billion yuan, an increase of 28.48 percent over the same period last year, and the net profit attributed to shareholders of listed companies was 178 million yuan, an increase of 77.93 percent over the same period last year.
Comments:
The performance is growing at a high speed and the brand advantage is obvious. The growth rate of the company's performance is better than the average level of industry growth. Mainly because the company's brand image is fully recognized by the market, taking into account the impact of power reform policy, distribution network construction will be expanded next year, so we expect to maintain rapid growth this year and next year.
The high-end market is advancing in an orderly manner, and the core competitiveness is constantly strengthened. The company recently issued an announcement to invest in the production project of digital signal and intelligent network cable for high-speed rail transit. We believe that the layout of the company's high-end cable business has been continuously strengthened. The second phase of flexible fireproof cable and aluminum alloy cable have all been completed and put into production. Aviation harness supporting electroplated conductor, elevator cable harness, military cable production capacity and other projects have also been put into production. The preliminary work of the submarine cable project has been basically completed. Demonstrate the company's determination to improve the core competitiveness of its products.
Rely on AVIC to consolidate its leading position. We believe that with the support of AVIC, the company has the dual advantage of "market + capital". The company will make full use of the advantages of the group to speed up market integration and consolidate its leading position in the aviation cable industry.
Investment advice: three quarters report results in line with expectations, maintain the buy rating, and give the 2016 40x PE, corresponding to the target price of 9.4 yuan.
Risk hint
1) demand in the electricity and aviation markets is lower than expected
2) the company's high-end products lag behind.