A brief description of events
The company released its annual report in 2016, with revenue of 1.972 billion yuan, an increase of 9.28% over the same period last year, and a net profit of 150 million yuan for shareholders of listed companies, a decrease of 8.61% EPS0.18 yuan over the same period last year, which is basically in line with the company's performance released in February 2017, KuaiBao, and in line with market expectations. At the same time, the company terminated the major restructuring and resumed trading on March 31, 2017.
Investment logic
The decline in gross profit margin affects performance and is expected to grow steadily in 2017. The company's revenue grew steadily, the stamping parts business was affected by increased competition, and the gross profit margin fell more, resulting in a year-on-year decline in the company's profits. The company's mold business newly signed orders reached a new high, the European business to reduce losses, new energy vehicle orders continue to grow, 2017 is expected to achieve steady growth. The stamping parts business has completed the product structure adjustment, and the operating condition has been improved in 2017. We believe that the company's performance will grow steadily in 2017.
In view of the new regulatory rules and the consideration of maintaining the stability of control, the major restructuring will be terminated. The company originally planned to acquire Chaoda equipment to expand and strengthen its main business, but for the consideration of the latest regulatory policy and ensuring the stability of the company's control, the company has applied to the China Securities Regulatory Commission to withdraw the application document for this reorganization. At the same time, the company said that it will continue to promote its development strategy and expand new profit growth points.
New energy vehicle business supporting Tesla, Inc. and other customers, orders continue to grow. Up to now, the company has undertaken orders for new energy vehicles of more than 300 million yuan, and the main customers are Tesla, Inc., Guoneng Automobile, NIO Inc. Automobile, United Motor, New Ocean and so on. The increasing demand for new energy vehicles also brings opportunities for the company to participate in its assembly, welding and stamping business.
Investment suggestion
Based on the mold, actively extend the industrial chain, the layout of emerging industries, performance valuation is expected to improve.
It is estimated that the EPS of the company from 2016 to 2018 is 0.22,0.27,0.35 yuan respectively. Buy rating, 6-month target price of 8.5 yuan.
Risk
The number of new car developments fell short of expectations.
The development of overseas business is not as expected.