Core ideas:
1. Event
Yunyi Electric released its 2016 three-quarter report on October 25. from July to September 2016, the company achieved operating income of 125 million yuan, an increase of 55.14% over the same period last year. The net profit attributed to the parent company was 15.4942 million yuan, up 255.01% from the same period last year. Basic earnings per share was 0.07 yuan, up 250.00% over the same period last year. By the end of September 2016, the company had achieved operating income of 380 million yuan, an increase of 23.01% over the same period last year; net profit belonging to the parent company was 77.1805 million yuan, an increase of 50.46% over the same period last year; and basic earnings per share was 0.46 yuan, up 38.46% from the same period last year.
two。 Our analysis and judgment
(1) the proportion of downstream demand for LIN bus products has increased, with revenue growing by 55.14% year-on-year in a single quarter.
The company's main products are automotive core electronic products such as automotive rectifiers, regulators, LIN bus and high-power automotive diodes. At present, it has entered the supporting system of mainstream joint venture manufacturers, supporting SAIC, Changan independent brands as well as Ford Mondeo and Fox. At present, import substitution has been gradually realized, and the products compete directly with overseas parts giants such as Bosch, Denso and Valeo. The rapid growth of revenue in the third quarter mainly benefited from (1) the halving of purchase tax on downstream models affected the release of demand at the end of the year. For example, Changan Ford sold 165300 units in the third quarter, an increase of 42.50% over the same period last year, promoting the company's performance. (2) the LIN bus business grew significantly in the second and third quarters, with contributing revenue rising from 1% at the beginning of the year to 10% of the company's revenue.
(2) the gross profit margin in a single quarter has increased by more than 3 percentage points, and the profitability of the LIN bus has been greatly improved.
The gross profit margin in the third quarter was 34.55%, an increase of 3.32 percentage points over the same period last year. This is mainly due to (1) the acceleration of the import substitution process of the company, the further increase in the proportion of supporting joint venture models, and the simultaneous increase of gross profit margin due to the promotion of the high-end process of customers; (2) the optimization of the company's product structure and the rapid increase in the proportion of LIN bus products with high gross margin. The growth rate of the company's net profit in the third quarter was 4.62 times that of revenue in the same period, resulting in a substantial increase in profitability.
(3) the acquisition of Yunbo technology thickens its main business, and its stable development is expected in the future.
High-power diodes have now been supplied, and Valeo, the leader in the supporting industry, has also entered the final sample delivery stage. During the reporting period, the company acquired an 85% stake in Yunbo Technology, which was consolidated in July. Yunbo Technology is mainly engaged in automotive regulators, with customers covering BOSCH, Remy, Huachuan Denso and other domestic and foreign manufacturers, supporting FAW, SAIC GM Wuling, Changan and other complete vehicle factories, with a leading market share in China. After the completion of the acquisition, the company will increase the production capacity of 3.8 million sets of regulators, complement each other with Yunbo in product structure and customer resources, speed up the import substitution process, and is expected to become another growth point of the company's future revenue and gross profit margin.
3. Investment suggestion
Maintain the recommended rating. At present, the company has successfully entered the supporting system of mainstream joint venture manufacturers, which has brought new growth points for revenue and gross profit margin. At the same time, the volume of LIN bus in the second and third quarter has made a core contribution to the improvement of revenue and comprehensive gross profit margin. In addition, the company's acquisition of 85% stake in Yunbo Science and Technology will further consolidate the main business, which will realize the complementary advantages of product structure and customer resources. We estimate that the company's parent net profit from 2016 to 2017 will be 125 million and 160 million respectively, corresponding to diluted EPS0.55, 0.70 yuan, PE48X, 38X, maintaining the "recommended" rating.
4. Risk factors.
1) the growth rate of matching vehicle sales is lower than expected due to the impact of the economy; 2) the progress of acquisition and integration is not as expected.