Main points of investment
Domestic first-class manufacturer of precision mold parts
The company is a domestic first-class precision mold parts manufacturer, headquartered in Suzhou, Jiangsu Province, the main products include precision mold parts, automation equipment parts, pharmaceutical moulds and medical equipment parts. The company's core products are precision mold parts represented by automotive mold parts, with customers all over the country's major vehicle manufacturers. With the rapid development of the automobile industry, as well as the company to build new plants, expand production capacity, and actively expand new business, the company is expected to maintain stable performance growth.
The performance of 2017Q1 rose sharply, and the net profit of home was + 134.45% compared with the same period last year.
In 2016, the company achieved revenue of 364 million yuan, year-on-year + 17.58%, parent company net profit of 52 million, year-on-year + 18.16%, deduction of non-return net profit of 47 million, year-on-year + 7.58% sparing EPS 0.96 yuan per share (0.78 yuan per share after share expansion). In terms of products, the annual revenue of precision mold parts products reached 326 million, + 18.44% compared with the same period last year, accounting for 89.55% of the total revenue. 2017Q1 achieved revenue of 113 million, year-on-year + 47.55%, home net profit of 19.31 million, year-on-year + 134.45%. The sustained and stable growth of the company's performance is mainly due to the expansion of demand in the downstream automobile market and the company's increased marketing expansion.
The gross profit margin of the company has decreased slightly, and the three fee structure of 2017Q1 has been obviously optimized.
The company's comprehensive gross profit margin in 2016 was 35.93%, year-on-year-1.75pct. The company's main products precision parts plate gross profit margin of 35.77%, year-on-year-1.87pct; automation equipment parts gross margin of 34.80%, year-on-year-2.13pct. In terms of three fees, the company's sales expenses are 28.03 million, accounting for 7.70% of revenue, year-on-year-0.2pct, management expenses 34.9 million, accounting for 9.59% of revenue, year-on-year + 0.34pct, mainly due to the increase in company R & D investment and IPO listing expenses; financial expenses 7.63 million, accounting for 2.10% of revenue, year-on-year-0.97pct, the total proportion of three fees is 19.38%, year-on-year-0.83pct. The total proportion of the three fees of 2017Q1 company is 13.9%, and the cost structure is obviously optimized, in which the management expense rate and financial expense rate are lower than 2016Q1 by 2.58pct and 1.92pct respectively. In addition, the net cash flow generated by the company's operating activities in 2016 was 58.21 million yuan, with a ratio of 111.94% to the return net profit, with high profit quality.
The rapid development of automobile industry brings new opportunities for mold production.
With the rapid development of China's automobile industry, moulds serving automobile production have also developed rapidly in recent years. The demand of automobile stamping die is no longer affected by its service life, but depends on the launch speed of new and modified models. Considering the rapid growth of China's new energy vehicle production capacity from 2016 to 2018, the company's annual report predicts that the number of new models in 2018 will be 10% higher than in 2015, reaching 316. In addition, with the intensification of global competition in the automobile market, in order to reduce the cost of new car development, foreign automobile manufacturers have come to China to purchase automobile panel moulds, resulting in a rapid increase in the export volume of automobile panel moulds in China.
The construction of the new factory and the fund-raising projects have been carried out in an orderly manner, demonstrating the company's ambition for development.
In order to seek faster development, the company built Yingbin new plant phase I project for capacity expansion and development, and obtained a construction permit in March 2017, which has started the construction of the project. According to the progress of construction, it is expected to be completed in March 2018. At the same time, the company has gradually launched a fund-raising project construction investment, and has raised funds to establish logistics, capital flow and information flow management as the core of the ERP system and other projects. In addition, the company continues to strengthen the implementation of R & D projects, further expand products and reduce production costs, with R & D investment in 2016 + 13.21% compared with the same period last year.
Profit forecast and investment suggestion
As a first-class precision mold parts manufacturer in China, the company has customers all over the main domestic vehicle manufacturers, actively increasing the business of traditional automobile mold parts series and expanding the new pharmaceutical mold and medical device parts series business, and is expected to maintain a stable performance growth trend. Taking into account the expansion of the company's share capital after listing, the company is expected to have an EPS of 1.25x1.63 EPS 2.33 yuan in 2017-2019, corresponding to PE44/34/24X. Coverage for the first time, giving a "overweight" rating.
Risk hint: the production expansion level of the new plant is lower than expected, and the performance is affected by macro-economy.