Key points of investment
Matters: In 2016, the company achieved operating income of 815 million yuan, a year-on-year decrease of 0.27%; net profit after returning to the mother was 48.45 million yuan, an increase of 17.57% over the previous year. The company's basic earnings per share is 0.15 yuan, and the proposed dividend is 1 yuan (tax included) for every 10 shares. The company's performance is lower than our expectations.
Ping An's point of view:
The main backup power business continued to peak: during the reporting period, the company achieved revenue of 815 million yuan, a year-on-year decrease of 0.27%, and net profit of 48.45 million yuan after returning to the mother, an increase of 17.57% over the previous year. In 2016, in a situation where market demand for diesel generators was influenced by macroeconomics and showed an overall decline, the company achieved a high market share in the collection projects and IDC fields of the three major operators by expanding the backup power market for communication and data center computer rooms, consolidating its dominant position in the communications field. At the same time, it strengthened the expansion of energy fields such as power plants, power grids, distributed gas stations, etc., so that its main business, diesel generator sets, achieved revenue of 7.2 billion yuan, an increase of 27.24% over the previous year, and gross margin reached 18.92%, down 0.91 percentage points from the previous year.
The NEV business is moving forward: During the reporting period, the NEV industry policy and ecological pattern have all undergone major changes. On the one hand, the introduction of the battery whitelist system raised the entry threshold for the industry, and on the other hand, the adjustment of logistics vehicle subsidy standards and additional restrictions on 30,000 kilometers of operating mileage made the adjustment of the e-logistics vehicle industry chain even more drastic. Under the new circumstances, the company completed the adjustment of its business structure. Through the acquisition of Jetstar New Energy and the transfer of Jetstar New Energy shares, the company further strengthened its vehicle operation business. At present, Jietai New Energy has set up 10 subsidiaries in Shanghai, Guangzhou, Shenzhen, Beijing, Tianjin and other provinces and cities, and has established cooperative relationships with express delivery companies such as SF Express, EMS, Yunda, Premium, Baishihui, and Debon, and has a certain number of operating vehicles.
On April 22, 2017, the company issued a non-public offering plan to raise no more than 812.6 million yuan to operate and service 11,000 new energy logistics vehicles in various cities across the country from 17 to 19.
Profit forecast and rating: Taking into account industrial policy and the adjustment of the company's business, we lowered the company's EPS forecast for 17-18 to 0.24 and 0.28 yuan (the original forecast was 0.38 and 0.54 yuan), and the new EPS for 19 was 0.35 yuan. Corresponding to the closing price PE on April 21 was 59.9, 49.7 and 39.9 times, respectively. We are optimistic about the company's growth prospects in the field of electronic logistics vehicles and maintain the “recommended” rating.
Risk warning: 1) the risk that the policy falls short of expectations; 2) the risk that electronic logistics vehicle sales fall short of expectations.