Event: the company released its annual report for 2016. During the reporting period, the company realized operating income of 343.8441 million yuan, an increase of 2.47% over the same period last year, a total profit of 49.6066 million yuan, a decrease of 0.64% over the same period last year, and a net profit of 42.655 million yuan belonging to shareholders of listed companies, a decrease of 0.59% over the same period last year.
Subway ventilation equipment leader, the main business growth rate is stable. Since its inception, the company has always focused on the R & D, production and sales of fans, mufflers, air valves and other ventilation system equipment in subway, tunnel, nuclear power, marine, civil and industrial fields. It has a complete system from product design, manufacturing, system integration to testing. During the reporting period, the company continued to maintain the leading edge in the domestic market in the field of subway and tunnel, and ranked first in market share. In the main business, the revenue of subway, civil, industrial and tunnel products accounted for 57.84%, 21.45% and 17.23% respectively, with year-on-year growth rates of-12.02%, + 35.53% and + 39.99%, respectively. The gross profit margin was 39.07%, 38.92% and 43.75% respectively, which remained stable.
Transform military industry + high-end equipment manufacturing to open up room for performance growth. On October 13, 2016, the company plans to buy 100% equity in Zhongqiang Science and Technology and 100% shares in Hongxiang Science and Technology for 1.05 billion yuan and 1.16 billion yuan respectively. Hongxiang Technology 2016 Mel 2019 promised that the net profit of return to its mother would not be less than 50 million yuan, 75 million yuan, 93.75 million yuan and 117.2 million yuan respectively, with a cumulative net profit of no less than 335.95 million yuan and a three-year compound growth rate of 32.84%. Zhongqiang Science and Technology promised that the net profit from 2016 to 2020 would not be less than 35 million yuan, 70 million yuan, 94.5 million yuan, 127.575 million yuan and 172.2263 million yuan respectively, with a cumulative net profit of not less than 499.3013 million yuan and a four-year compound growth rate of 48.94%. After the completion of this reorganization, the company's main business will expand from fan manufacturing to military industry and high-end equipment manufacturing fields. with the help of the technical market resources of Zhongqiang science and technology in the military field and the mature products and technological advantages of red technology, the listed companies will gradually establish their status as a "high-end equipment manufacturer of military-civilian integration" and realize the in-depth development of military-civilian integration.
Earnings forecasts and ratings. As the leader of subway ventilation equipment, the company will fully benefit from the dividend brought by large-scale infrastructure investment in the future. Without considering the impact of this acquisition on the company's performance, it is predicted that the company's operating income from 2017 to 2019 is 413 million yuan, 495 million yuan and 569 million yuan respectively, the net profit attributed to the parent company is 82 million yuan, 98 million yuan and 112 million yuan respectively, the EPS is 0.52,0.61 yuan and 0.70 yuan respectively, and the PE of the corresponding stock price is 80.38,68.52 and 59.71 times respectively. Considering the thickening of the performance brought by M & An and the dilution of equity, it is estimated that the EPS from 2016 to 2018 is 0.84,1.06,1.33 yuan respectively, and the PE of the corresponding stock price is 49.76,39.43,31.43 times respectively. Give "overweight" investment rating.
Risk hint: major asset restructuring failed, subway, tunnel fixed asset investment growth slowed down.