Events:
According to the company's annual report, the revenue in 2016 was 10.79 billion yuan, an increase of 5.3% over the same period last year, and the net profit attributed to shareholders of listed companies was 834 million yuan, up 7.1% from the same period last year. The gross profit margin was 21.95%, up 0.7% from the same period last year, and the net profit rate was 8.26%, which was 0.07% higher than the same period last year. EPS0.36 yuan, in line with expectations. At the same time, it is proposed to distribute a cash dividend of 1 yuan for every 10 shares to all shareholders and 2 shares for bonus shares.
The performance is in line with expectations, and the steady growth of the main business can be expected.
The company mainly deals in chassis system, transmission system, braking system and other automotive system parts and assemblies. In 2016, the company benefited from the growth of domestic automobile production and sales, and the company's main business maintained steady growth. During the reporting period, the company achieved a gross profit margin of 21.95%, an increase of 0.7 percentage points over the same period last year. During the period, the expense rate was 12.72%, unchanged from the same period last year, in which the sales expense rate, management expense rate and financial expense rate were 3.62%, 8.09% and 1.02% respectively, with year-on-year changes of + 0.16%, + 0.22% and-0.36%, which remained stable as a whole. During the reporting period, the company completed a number of product technology innovation projects and intelligent manufacturing technology innovation projects to provide effective support for the development of the high-end market, but also laid the foundation for the stable growth of the follow-up main business.
Endogenous extension, optimistic about the company's expansion in new fields
The company seeks development around lightweight, intelligent and new energy. In terms of lightweight, the company plans to carry out innovative research on new aluminum alloy materials, fewer parts and small specifications, and to seek equity cooperation among companies with the production basis and technology accumulation of aluminum alloy auto parts. In terms of intelligence and new energy, the company plans to carry out R & D and industrialization of automotive electronic products such as ADAS, ESC, WBS, AEB, EPBi, etc., and to carry out investment and cooperation for companies with accumulated automotive electronic production technology, and strive to implement an existing company chassis braking business plate based on the evolution and upgrading of intelligent products to the ground production. We believe that the company intends to seek development opportunities in new areas through endogenous epitaxy, and is optimistic about the expansion of the company in the fields of lightweight, intelligence and new energy.
Increase the rating, the target price is 15 yuan.
The company's main business is growing steadily, and it is actively transforming to lightweight, intelligent and new energy industries. There is much room for improvement in performance and valuation. We estimate that the company's EPS in 2017-2019 is 0.41 yuan, 0.46 yuan and 0.54 yuan respectively. Maintain the overweight rating with a 6-month target price of 15 yuan.
Risk hint: the growth rate of automobile production and sales is slowing down; the expansion of new business is not as expected.
