Summary of the report:
Event: in 2016, the company achieved operating income of 2.385 billion yuan, an increase of 6.98% over the same period last year, and the net profit of shareholders belonging to listed companies was 66.1259 million yuan, an increase of 53.42%, corresponding to an EPS of 0.18 yuan, an increase of 50.00% over the same period last year.
Trade enforcement led to revenue growth, while the southwest base brought a substantial increase in business. In 2016, the company's basic logistics, integrated logistics and trade enforcement all increased year-on-year, with year-on-year growth rates of 2.68%, 5.30% and 20.98%, respectively, of which trade enforcement business income increased most significantly, which became the main reason for revenue growth. On the other hand, the low growth rate of basic logistics and the narrowing growth rate of comprehensive logistics are mainly affected by the downturn in the international market, the decline in the growth rate of high-end consumer electronic products, and the shrinking market of traditional consumer electronic products. From a regional point of view, the revenue growth rate in the southwest region is as high as 52.68%, and the proportion of revenue has also increased from 6.38% to 9.10%, mainly due to the company's 16-year investment of 199 million yuan to establish the southwest supply chain base, and the business in this region has been greatly improved.
Labor costs rose and gross margins fell slightly. Due to the rise in the level of domestic labor costs, the personnel costs of the company's integrated logistics business increased significantly, an increase of 104.25% over the same period last year, driving the overall integrated logistics cost up by 10.07%, which was higher than the income growth rate, making the comprehensive logistics gross profit decreased by 3.21pct to 25.83%. In addition to the basic logistics growth of 2.92%, the company's other business gross margins have declined, 16 years the company's overall gross profit margin of 16.15%, a year-on-year decrease of 0.92%.
There has been a substantial increase in foreign exchange and non-profit, thickening net profit. Due to the sharp depreciation of RMB against the US dollar in 2016, the company's exchange earnings reached 15.6162 million yuan, an increase of 129.74% over the same period last year. In addition, non-recurring profit and loss increased by 8.86 million yuan (+ 50.28%), resulting in a 34.37% year-on-year increase in 16-year net profit and an increase in net interest rate to 3.33%.
Investment suggestion: the company's EPS in 17-19 is expected to be 0.19,0.22,0.22 yuan, corresponding to 54x/48x/47x. We are optimistic that the company will actively expand to automobile, supply chain finance, venture capital (indirect shareholding excellent express delivery) and other fields while stabilizing the development of traditional business IT manufacturing industry, giving "overweight" rating.
Risk Tip: IT manufacturing downside; new business expansion risk.
