In line with expectations in the first quarter of 2017
Shuanglin shares announced 1Q17 results: operating income 913 million yuan, an increase of 35.12% over the same period last year; net profit belonging to the parent company was 89.829 million yuan, an increase of 14.39% over the same period last year, corresponding to a profit of 0.226 yuan per share. The company's non-net profit is 85.926 million yuan, an increase of 16.2% over the same period last year, which is basically in line with our expectations.
Trend of development
1Q17's performance grew steadily, and the cost of gross profit had a great impact: the company's 1Q17 revenue increased by 35.1% to 913 million yuan over the same period last year, continuing to maintain high growth. However, due to the rise in costs such as steel, the company, especially the new Torch subsidiary, had a greater impact on the company. The company's gross profit margin in the first quarter was 24.53%, down 4.2 percentage points from the same period last year. The sharp decline in gross profit from the same period last year is the main reason why the company's net profit growth rate is lower than that of income growth. As costs rose, the company increased cost control, and the rate of sales / management expenses fell 1.14 percentage points year-on-year by 0.51 percentage points.
Our business continues to grow at a high rate, and the growth rate of the new torch is at the bottom: from a business point of view, the company's injection molding, seat parts business new projects CN180, B17 began mass production this year, while the new base is also gradually put into production, is expected to maintain more than 30% growth in the first quarter. However, due to the adjustment of export business and the sharp rise in steel prices, the new torch business does not increase profits, and the growth rate basically reaches the bottom. With the adjustment of the company's customer structure and cost impact, hub bearing business is expected to resume. At the same time, the new torch has entered SAIC-Volkswagen and other joint venture customers, and high growth is expected in 2018.
Epitaxial layout is expected to contribute to performance, DSI injection is expected: the company's epitaxial layout has been actively promoted, cash acquisition of Chengye shares may be landed, 17 / 18 committed performance of not less than 5300 / 59 million yuan. The group DSI automatic gearbox will also benefit from the increasing trend of automatic transmission ratio in the future, sales are expected to increase rapidly in 2017, and the enhanced scale effect will enhance the company's profitability and profit scale.
Profit forecast
We keep our full-year earnings per share forecast for 2017 / 2018 unchanged.
Valuation and suggestion
At present, the company's share price corresponds to 24.5x 2017e P amp E. We maintain our recommended rating and target price of 38.00 yuan, which is 46.27% upside from the current share price. It corresponds to 30x 2017e Pamp E.
Risk.
The cost rose more than expected, and the DSI project was lower than expected.
