High growth in the first quarter of 2017 and is expected to grow steadily for the whole year
Dongan Power issued a pre-increase announcement of first-quarter results, Q1 realized a net profit of about 24 million yuan in 2017, an increase of 583% over the same period last year (3.52 million in the same period last year, including a loss of 22 million, and Dongan Mitsubishi contributed nearly 26 million). The year-on-year increase in Q1 performance in 17 years is mainly due to the increase in gross profit margin and the decline in three rates. Considering the higher base of gross profit margin of Q2, Q3 and Q4 in 16 years, we believe that the performance growth of Q2, Q3 and Q4 in 17 years may slow down, and the growth of annual performance will be steady.
Sales of our department increased slightly in the first quarter, and gross profit margin increased.
In the first quarter of 2017, Dongan Power sold 70761 engines, a slight increase of 0.54% over the same period last year. We believe that: on the basis of the mature expansion of the M series engine production line of our department, the gross profit margin of Q1 in 17 years is expected to be the same as the previous year, with an increase in gross profit margin of 15% Q4 in 16 years and 7% gross profit margin in Q1 in 16 years), which directly contributes to Q1 profits. We expect that Q1 in 17 years may reverse losses (Q1 loss in 16 years is 22 million). The company plans to sell 305000 engines in 2017 (310000 in 16 years) and 2.38 billion yuan in planned sales revenue (2.2 billion yuan in 16 years). To sum up, considering the low base performance of Q1 in 16 years, the headquarters is expected to achieve steady growth for the whole of 2017.
Dong'an Mitsubishi engine planning sales decline, 6AT business supporting to promote orderly
In the first quarter of 2017, Dongan-Mitsubishi engine sales of the participating company were 110806, an increase of 3.22% over the same period last year. In 2017, Dongan-Mitsubishi engine plans to sell 346000 units (450000 units in 16 years), with planned sales revenue of 3.31 billion yuan (16-year sales income of 3.3 billion yuan). The reason for the decline in planned engine sales in 17 years and the stability of revenue is due to the increase in the production scale of Mitsubishi transmissions. In 17 years, the planned production and sale of transmissions is 70,000 units (22000 units in 16 years), of which 6AT plans to produce and sell 20,000 units, supporting Zhongtai. We expect to mainly support the SUV model Zhongtai T600 (an average of 7000 vehicles sold in 17 months), which may be put off production in April. We believe that in the context of Mitsubishi engine sales planning, the production and sales scale of the high unit price transmission business (especially 6AT) has expanded, and the customer support has been promoted in an orderly manner, which provides a certain guarantee for Mitsubishi's performance in 17 years.
Risk hint
The expansion of 6AT sales fell short of expectations.
Increase in gross profit margin at headquarters + orderly promotion of Mitsubishi 6AT, maintain buying considering that the company's 17-year gross profit margin has room for improvement, Mitsubishi 6AT is advancing in an orderly manner. It is predicted that the annual EPS in 17-18-19 will be 0.23 6AT 0.34 yuan, and the corresponding PE will be 58-47-39 times, respectively.