Quarterly tax and sales expenses have increased significantly, and the performance is in line with market expectations.
The company achieved revenue of 605 million in the first quarter of 2017, down 4.77% from the same period last year. The net profit belonging to listed shareholders was-25.78 million yuan, down 667.49% compared with 4.54 million yuan in the same period last year, which is in line with the forecast loss of 20 million yuan to 30 million yuan. The decline is mainly due to the insufficient operating rate of the smartphone industry in the off-season and the rise in labor costs. In addition, the sharp increase in taxes and sales fees in the first quarter of this year also weighed on the performance. Due to the payment of value-added tax and additional tax, corporate tax and surcharge increased by 1416.71% compared with the same period last year, reaching 1.9655 million yuan; sales expenses reached 19.1285 million yuan in the same period, an increase of nearly 5.43 million yuan.
2017Q2 makes a substantial turnaround and is optimistic about the company's performance in the second half of the year.
As stated in our previous in-depth report, Tian Yu and Xia Chuanwu, the former actual controllers of the company, stopped renewing the Joint Control Agreement in 2013. As of March 2017, Xia Chuanwu, as the actual controller of the company, had a shareholding of 19.55%, and the problems left over from history had been digested. Through strengthening research and development and increasing investment in new businesses in 2016, the company has achieved remarkable results in its performance transformation, with a gross profit margin of 9.83% for the whole year, the highest in nearly three years, and a 16-year net profit of 16.82 million yuan, successfully turning losses into profits. In the company's quarterly report, it is estimated that the company will achieve a net profit of 50-5 million yuan in the first half of 17 years, that is, 17Q2 will achieve a net profit of 26.28 million-30.78 million in a single quarter. We are optimistic about the company's performance in the second half of the year.
Lock in the direction of quantum dots and intelligent manufacturing platform, and actively cultivate new profit growth points
With the rise of OLED display technology, more and more attention has been paid to quantum dot materials with even better performance, and related products have begun to be introduced into the market. The company's annual report makes it clear that it will maintain its R & D investment in optoelectronic display business and speed up the accumulation and industrial application of new quantum dot material technology. In addition, the company completed a private offering of 96.8 million shares in March, raising $756 million, mainly for smart manufacturing and innovation platform construction projects. Through the construction of innovative platform, the company will enter into emerging markets such as smart wear, smart home, car networking, AR/VR, etc., and will achieve long-term binding with customers and bring technology and order resources for the company. Based on the company's long-term technology, customers and experience in 3C manufacturing and automation production, quantum dots and intelligent manufacturing platforms will become new profit growth points in the future.
Be optimistic about the development potential of intelligent manufacturing and optoelectronic industry, and maintain the rating of increasing holdings.
Considering the capability characteristics of the company in the field of intelligent manufacturing and the development potential of the optoelectronic industry, the company's main business gradually ushered in the inflection point, maintaining the previous profit forecast of 55.14 million yuan, 111 million yuan and 188 million yuan in 17-19 years. Although the short-term valuation is too high, the growth rate of the company will be high in the next three years. We believe that there are trading opportunities. From the perspective of PEG, we will give the company 59-65 times PE in 2018, corresponding to a target price of 11.21-12.35 yuan.
Risk hint: the improvement of intelligent manufacturing efficiency is lower than expected, the order of intelligent hardware products is lower than expected, and the progress of optoelectronic industry is lower than expected.