Main points of investment:
The company is the leading enterprise of domestic printing equipment, with outstanding manufacturing capacity of middle and high-end equipment. Founded in 1995, the company has worked in the industry for more than 20 years and has now become the first brand of domestic printing and packaging equipment. The main products are die ironing machine, die-cutting machine, box paste machine, inspection machine and other post-press equipment and related solutions. At the same time, in recent years, through cooperation with Heidelberg, Serudi and other overseas well-known companies and the introduction of high-end talents, the company has successively introduced high-end equipment such as gravure press and 3D printing to the market. gradually improve the company's high-end printing equipment product line and open up the market space.
Cloud printing opens up the long-term growth space of the company. As early as 2013, the company set up a joint venture with Taiwan Jianhao to enter the field of cloud printing. Drawing lessons from Jianhao's successful development model and software platform in Taiwan, the company's cloud printing business has shown rapid growth in recent years. 2016H1 achieved sales revenue of 30.05 million yuan, an increase of 42% over the same period last year. The company's cloud printing business mainly adopts the B2B2C model, and there are tens of thousands of cooperative manufacturers (mainly small and medium-sized copy shops, advertising companies, etc.). With the continuous development of cooperative customers and the continuous growth of supporting capacity, this business is expected to maintain rapid growth in the future. At the same time, with the expansion of its scale and the improvement of its management ability, its profit level is expected to improve. We believe that cloud printing is an important direction to improve the efficiency of the printing industry, the market space is large, the company's cloud printing business competitive strength is strong, in line with the industrial development trend, will become the company to open the growth bottleneck of the main business.
An additional 1.49 billion will be invested in the R & D of intelligent printing equipment and the construction of production line, and the upgrading of intelligent manufacturing will help the company to further improve its equipment manufacturing capacity. The trend of consumption upgrading has gradually led to the trend of high-end printing and packaging becoming more and more obvious. at the same time, the requirements for intelligent and high-end printing equipment are also increasing day by day. after the project reaches production, it will continue to enhance the company's competitive strength. At present, the company's fixed increase plan has been approved by the CSRC.
Profits declined in 2016 due to various factors, and may achieve rapid growth in 2017. The company's 2016 performance forecast achieved a profit of 1.32-165 million yuan, an increase of-20 percent over the same period last year, mainly due to the company's increased investment in overseas market development and intelligent product research and development, as well as the reduction of printing revenue caused by destocking in the domestic tobacco industry. Looking forward to 2017, the destocking of the downstream industry is basically over, the gradual release of the company's new products and cloud printing, and the continued development of overseas markets are expected to promote rapid growth.
Investment advice and profit forecast. We believe that in the short and medium term, the company's performance is expected to bottom out and pick up; in the medium to long term, the company's "equipment + service" model will open up the company's growth space. We predict that the net profit attributed to the parent company from 2016 to 2018 will be 1.41 million yuan respectively, with a year-on-year increase of-14.15%, 46.72% and 18.55%, respectively. The EPS that does not take into account additional dilution will be 0.42, 0.61, 0.73, respectively, and the current stock price will correspond to 2016-2018 PE, which is twice that of 38-26-22. For the first time, it will be given a rating of 30 times PE in 2017, with a target price of 18.30 yuan and an "overweight" rating.
Risk hint. The macro economy continued to decline; the recovery in downstream demand for printing equipment was lower than expected.