Main points of investment:
The company announced its 2016 results, KuaiBao. In 2016, the company achieved a total operating income of 1.734 billion yuan, an increase of 102.12% over the same period last year, a net profit of 277 million yuan, an increase of 102.67% over the same period last year, and basic earnings per share of 0.44 yuan, an increase of 83.33% over the same period last year. Of this total, Q4 in 2016 achieved revenue of 696 million yuan, an increase of 148% over the same period last year, and a net profit of 109 million yuan, an increase of 117% over the same period last year.
The main business has increased significantly-Guanzhi and Huaxing have promoted revenue and performance. In 2016, the company's revenue and performance increased significantly, mainly due to: 1) the original main power automation business and industrial automation business increased significantly compared with the same period last year; 2) Guanzhi Automation and Huaxiao Precision began to merge in May 2016.
Yongqian mechanical and electrical: robot leader, rapid growth is expected. Yongqian mechanical and electrical core products are manipulator products, which occupy a leading position in the field of domestic intelligent manipulators. In recent years, the company has expanded into electrical equipment, lithium batteries, military industry, diapers, environmental protection, bathroom, building materials and other fields. At present, the proportion of income in the automotive industry has dropped to about 50%. In addition to the continuous expansion of business areas, we judge that the company will continue to make efforts in high-end products, in-depth production lines, and special aircraft product development. In 2016, Yongqian mechanical and electrical performance commitment of 75.17 million yuan, we expect the actual performance is likely to exceed the performance commitment, conservatively estimated to maintain growth of about 25-30% in 2016-2017.
Endogenesis and extension to create a giant in the field of intelligence. At the time of the acquisition of Yongqian Machinery, the company's market capitalization was 4 billion yuan; through the acquisition of Yongqian Machinery and Machinery, Guanzhi & Huaxiao, the company's market capitalization grew to 15 billion yuan. We believe that the company will still achieve the double growth of revenue and market value through extension and endogenesis. Endogenous aspect: the company previously acquired the target is a segment of the industry leader or a unique competitive enterprise, endogenous growth is sufficient. The three companies mainly serve the automobile market and have a strong synergy effect. After the completion of the acquisition, the development of the three enterprises exceeded previous expectations. Extension: from the perspective of the company's development path, we think that the company may continue to expand its business territory by selecting enterprises with complementary business or leading advantages in a certain field.
Profit forecast and investment advice. It is estimated that the company's operating income from 2017 to 2018 will reach 2.101 billion yuan and 2.55 billion yuan, and its net profit will reach 357 million yuan and 437 million yuan, up 28.65% and 22.42% respectively over the same period last year. The diluted earnings per share are 0.49 yuan and 0.60 yuan. Give a valuation of 55 times in 2017, corresponding to the price of 26.95 yuan per share, and increase the rating.
Risk factors. The risk of industrial integration falling short of expectations.