Event description

The company released its three quarterly results for 2016.

Event comment

High performance growth, sound aluminum cover, garden contribution to incremental income. Lipeng shares achieved operating income of 1.161 billion yuan in the first three quarters of 2016, an increase of 30.81 percent over the same period last year, and a net profit of 91 million yuan belonging to shareholders, an increase of 31.89 percent and 0.12 yuan compared with the same period last year. The change in the company's profit is mainly due to the large growth of the garden business in this period. The company will realize the development of anti-counterfeit bottle cap and garden ecology in the future. with the steady development of the traditional aluminum cap industry brought by the warming of the wine industry, as well as the continuous increase of the company in the garden industry, the company's future performance may usher in a breakthrough. It is estimated that this year's net profit will increase by 28.60% to 40.14% over the same period last year, and that in the fourth quarter, net profit will increase by 24.21% to 51.17% over the same period last year. EPS0.20~0.22 for the whole year.

Profitability remained stable and the expansion of the garden business was a drag on cash flow. In the first three quarters of 2016, the company's gross profit margin was 20.23%, down 0.27% from the same period last year; the net profit rate was 7.88%, up 0.06% from the same period last year; and the expense rate during the period was 8.68%, up 0.03% from the same period last year. This is mainly due to the increase in the scale of bank loans due to the expansion of the company's garden business. With the expansion of the revenue scale of the garden business in this period, more progress funds and deposits were paid, resulting in an operating cash flow of-362 million yuan, a decrease of 131 million yuan compared with-231 million yuan in the same period last year; at the same time, the expansion of the garden scale increased the unsettled output value of the construction and increased the inventory in the current period by 512 million yuan.

The company's operating income of Q4 last year, Q1, Q2 and Q3 reached 4.70,3.61,3.95 and 405 million yuan respectively, an increase of 85.85%, 42.83%, 7.80% and 50.93% respectively over the same period last year. The net profit attributable to shareholders of listed companies was 0.52,0.23,0.33 and 35 million yuan, up 297.46%, 58.54%,-7.70% and 87.56% respectively over the same period last year. As a result of the integration into the garden, and the garden industry has the seasonal characteristics of settlement, the company's performance grows rapidly and the fourth quarter income and profit contribute more to the annual performance.

Orders and financial guarantee, garden business growth is expected in the future. The company is optimistic about the future development prospects of the garden industry and the opportunities brought by PPP, and cuts into the garden industry through the acquisition of Huayu. Huayu Garden has the qualifications of landscape construction, landscape planning and design and environmental pollution control. It is a comprehensive enterprise of landscaping and environmental management in the whole industry chain integrating landscaping, ecological restoration, environmental treatment, antique architecture, production and marketing of flowers and seedlings, and the company has a large market in southwest China, and resources in Shandong Province through listed companies. Play a good synergistic effect with listed companies to develop the green environmental protection market in Shandong Province. Over the past 15 years, the company's garden business has greatly exceeded the original main business, and according to the report, the garden gross profit margin has exceeded the original aluminum products by 9.43%, becoming the mainstay of the company's performance. The company has actively developed PPP business, and it has been announced that 1.377 billion PPP orders have been signed. The marginal improvement of PPP model on the performance and cash flow of municipal gardens and ecological environmental protection companies is the most obvious. In the future, as the national policy on PPP project model continues to increase, the company will take advantage of PPP to expand business volume and further open the garden and environmental protection market space. Huayu promised to exceed its performance in 14 and 15 years, and promised to deduct non-return net profit of not less than 1.69 yuan and 198 million yuan next year, which is expected to be under little pressure. This year, the company has approved an additional 781 million yuan of funds, 620 million of which will be used for the company's ecological PPP project. with the arrival of funds, the progress of the ecological project will be accelerated, and the performance of the garden ecological business is expected to be confirmed quickly.

Aluminum bottle caps operate steadily and will benefit from consumer upgrading in the long run. The company is the leading manufacturer of anti-counterfeit bottle caps in China, the only listed company in China, and the largest anti-counterfeit bottle cap production base in Asia, and its main customers are second-and third-tier liquor enterprises. The company's traditional business will benefit from consumption upgrading, on the one hand, consumption upgrading will bring about a pick-up in the wine industry, and the company's traditional business of anti-counterfeiting bottle caps will maintain long-term steady growth; on the other hand, with the upgrading of consumption, the public's demand for anti-counterfeiting and anti-counterfeiting will be higher and higher. the company's anti-counterfeiting bottle cap business will be further expanded to health wine, beer, pre-blended wine, wine, medicine, olive oil, high-grade drinking water and other fields. The fixed increase of 60 million will be used in the bottle cap QR code technology upgrading project, which will further enhance the added value of the products and improve the core competitiveness.

Investment advice: forecast company 2016-2018 EPS 0.21 Universe 0.34 yuan, corresponding to 2016-2018 PE is 41-32-26 times, given an overweight rating.

Risk tips: economic fluctuation risk, garden business payback risk and so on.