Brief comments on the performance of the annual report
The company recently released its 2016 annual report, with operating income of 4.068 billion yuan in 2016, an increase of 1.02% over the same period last year; net profit belonging to the owner of the parent company was 109 million yuan, up 20.38% over the same period last year; and basic earnings per share was 0.071 yuan, up 20.34% over the same period last year.
Comments:
The bankruptcy liquidation is completed and the valuation is repaired. The bankruptcy liquidation of Tianwei Sichuan Silicon Co., Ltd and Leshan Leshan Tianwei Silicon Technology Co., Ltd., invested by the company, has been basically completed, and the valuation will be repaired this year. We believe that the most difficult period for the company is over. Performance is bottoming out.
Benefit from the power grid investment, the growth of the main business is expected. In 2016, the operation of the domestic economy has slowed down and stabilized, the supply-side structural reform has achieved initial results, the growth rate of the power transmission and transformation industry has also gradually increased, and the investment in the power grid has increased by 16.9% compared with the same period last year. The company has mature design and manufacturing technology in the manufacture of high-voltage and large-capacity transformers, the technical level of the products is in the leading position in China, and has a high market share. The company achieved revenue of 4.068 billion yuan in 2016, an increase of 1.02 percent over the same period last year, while the net profit belonging to shareholders of listed companies was 109 million yuan, up 20.38 percent from the same period last year. We believe that the company will benefit from the grid investment during the 13th five-year Plan period and will maintain steady growth.
Take "Belt and Road Initiative" to speed up the upgrading of manufacturing in China. The company took advantage of the national "Belt and Road Initiative" strategy to optimize the production structure, and the gross profit margin of equipment exported abroad increased by 20.96% in 2016 compared with the same period last year. And in 1000kV AC UHV transformer, 750kV class large capacity and high impedance autotransformer, EHV generator main transformer, extra large capacity converter transformer, 1000kV single main column large capacity shunt reactor and other key technologies and product development investment of more than 100 million, to speed up the upgrading of manufacturing in China to ensure the company's leading position in technology.
Investment suggestion: according to the consistent forecast of Wande, the company's revenue in 2017 and 2018 is 5.232 billion and 6.559 billion respectively, the net profit is 215 million and 396 million respectively, and the EPS is 0.140.26. We haven't covered the company yet.
Risk hints: increased competition in the industry; great fluctuations in raw material prices; increased difficulty in the recovery of accounts receivable and increased inventory.
