Summary of the report:
Summary of the annual report: during the reporting period, the company's operating income was 514.6091 million yuan, down 9.08% from the same period last year, and the operating cost was 265.7682 million yuan, down 9.36% from the same period last year. The net profit belonging to shareholders of listed companies was 85.0701 million yuan, an increase of 13.54% over the same period last year.
For the whole year, revenue declined and net profit increased year-on-year. During the reporting period, revenue fell 9.08% compared with the same period last year, mainly due to changes in the sales model of coded equipment and ladle copper leads during the reporting period, resulting in an increased decline in China Railway's operating income compared with the same period last year. Operating income decreased by 34.32% compared with the same period last year, and net profit decreased by 79.96%. However, the increase in net profit was due to an increase in non-operating income of 31.36 million yuan over the same period last year as a result of the company's receipt of value-added tax returns.
The proportion of urban rail business has increased, and the layout of plate business is expected to continue to develop. According to industry classification, during the reporting period, the company's revenue from national railways, factories and mining enterprises, local railways and urban rail transit accounted for 70.31%, 1.72% and 18.95% respectively, of which the proportion of urban rail transit business was less than 1% compared with 2015. Plate income accounted for a large increase, due to the increase in sales revenue caused by the opening of Zhengzhou Metro Line 1 and Line 2, and the absolute income increased by 2035.18%.
Increase the intensity of product research and development, and strive to expand the pilot verification and optimization of sub-new products. During the reporting period, the company stepped up product research and development, made efforts to expand the pilot verification, optimization and improvement of sub-new products, actively participated in the formulation of industry standards and specifications and the mass promotion of the whole road, taking "big data" technology as the main line, equipment health management as the goal, explore the construction of electrical equipment monitoring ecology, build a large monitoring ecological platform for electrical equipment maintenance, according to the industry demand and technical development trend. Actively start the project and prototype development of cloud AFC system Promote the digital control technology platform of power products.
Profit forecast and investment suggestions: in the future rail transportation industry, the railway fixed assets investment will remain high, the urban rail industry will develop rapidly, and the company will benefit from the industry boom. We estimate that the company's EPS for 2017-2019 will be 0.26 pounds, 0.29 dollars, 0.33 yuan, with a "buy" rating.
Risk hints: the risk of industry policy change; the risk of increased industry competition may lead to smaller profit margins; the risk of efficiency decline brought about by new areas of expansion and business integration.