Summary of the report:
Performance summary: in 2016, the company achieved operating income of 1.872 billion yuan, an increase of 0.90% over the same period last year; the net profit attributable to shareholders was 98.41 million yuan, down 31.41% from the same period last year.
Downstream tobacco market demand is low, revenue growth is slowing down. During the reporting period, the company's revenue decreased slightly compared with the same period last year, mainly due to tobacco label printing, the main downstream application market of vacuum aluminized paper, but domestic cigarette sales declined due to the macroeconomic downturn and the implementation of tobacco control policies. The company's net profit declined significantly compared with the same period last year, on the one hand, due to the slowdown in revenue growth, and on the other hand, due to the company's increased investment in R & D. the management expenses for the current period were 254 million yuan, an increase of 18.46% over the same period last year, of which R & D expenses and employee compensation increased by 22 million yuan. With the strengthening of cost control and the gradual contribution of new business to profits, the company's net profit is expected to bottom out and pick up.
The gross margin is stable as a whole, and the rising expense rate is a drag on the net interest rate. During the reporting period, the company's overall gross profit margin was 28.10%, an increase of 0.33 percentage points over the same period last year. In terms of expense rate, the company's sales expense rate and financial expense rate are basically stable, while the increase in management expense rate is mainly due to the increase in R & D investment and employee salary. During the reporting period, the company's net profit margin was 5.26%, down 2.48 percentage points from the same period last year, mainly due to the increase in the rate of management expenses.
Traditional vacuum aluminized paper is facing the pressure of growth, so we will actively increase the size of the new packaging business. The traditional business is affected by the depressed demand for tobacco downstream, and its revenue is facing growth pressure. therefore, the company is extremely opening up new markets and intends to raise no more than 517 million yuan through a non-public offering, of which 155 million yuan is used to supplement working capital. the rest is used to invest in the construction of new three-dimensional free-forming environmental protection packaging and microstructure optical packaging materials. The new three-dimensional free-forming environmental protection packaging not only has diversified packaging forms and strong plasticity, but also meets the food-grade packaging standards, and has obvious advantages in environmental protection, anti-counterfeiting, cost and practicability, so it is optimistic about the market prospect of the product.
Profit forecast and rating: the net profit growth rate for 2017-2019 is expected to be 48.50%, 23.47% and 20.86%, respectively. The EPS is 0.21, 0.26 and 0.32 yuan, respectively.
Risk hint: tobacco control policy is tighter; market expansion of new packaging materials is not as expected