Events:
On the evening of August 29, Ke Liyuan released its semi-annual report in 2016. in the first half of the year, the company achieved operating income of 815 million yuan, an increase of 124.76% over the same period last year, mainly due to the increase in income from power batteries, system assemblies and trade business. The net profit loss of shareholders belonging to the listed company is 64.4825 million yuan, the performance is slightly lower than expected, mainly because the company's power battery, system assembly and other new business is in the pioneering period, profitability needs to be improved.
Main points of investment:
The traditional civil Ni-MH battery has developed steadily, and the quantity of nickel ore products has increased and the price has dropped. The company is a major domestic manufacturer of nickel series batteries, with revenue of 149 million yuan and gross profit of 23.17 million in the first half of the year. The company actively develops overseas markets, and its products continue to occupy a dominant position in high-end fields such as intelligent robots. Nickel mineral products are the company's traditional main business. Sales continued to rise in the first half of the year, and revenue declined due to the fall in nickel prices. Revenue in the first half was 84.24 million yuan, down 16.85% from the same period last year, but the gross profit margin was 19.86%, which remained basically stable.
The revenue of power battery and system assembly is increased, and there is a huge room for profitability improvement. In the first half of the year, the company's power battery business developed smoothly, the orders for Ni-MH power batteries and positive and negative plates for hybrid cars increased steadily, with an income of 137 million yuan and a small loss of 3.91 million yuan in gross profit, mainly due to a decline in the rate of quality products caused by lack of experience in large-scale production. This year, the supply of PEVE to Toyota is expected to be 60,000 sets, and orders are expected to continue to rise; in terms of system assembly, the company earned 42.37 million yuan in revenue and 24.25% gross profit in the first half of the year. During the reporting period, the hybrid platform CHS has received 5000 orders from Geely, and the business development has been smooth. We believe that the company's power battery, system assembly and other new business is still in the development period, downstream customers are more concentrated, the company's bargaining power is weak, with limited mass production experience, short-term profit pressure is a normal phenomenon. In the future, as the company continues to develop the hybrid car market, the new demand of downstream customers is exuberant. As the absolute leader in the domestic hybrid field, the company has room to improve its profitability.
The plan for additional issuance has been issued, and the firepower of expanding production capacity has been fully opened. On June 15 this year, the company issued a private placement plan to raise no more than 1.5 billion yuan for Hunan Keba 508 million power battery industrialization project, Changde Liyuan annual output of 6 million square meters of nickel foam project and CHS hybrid assembly research and development project, including hydrogen fuel cell vehicle hybrid research and development project and CHS Japan Research Project. We believe that the company's additional investment project will make a breakthrough in production capacity, scope of application, business area and other aspects, and further ensure the smooth expansion of the company's business in the future.
Adjust profit forecast, downgrade to "overweight" rating: in the first half of the year, the company's business expansion is smooth, profitability is under short pressure and does not change the long-term upward trend. To be cautious, we adjust our profit forecast (down in 16 years and slightly higher in 17 and 18 years based on smooth business expansion). The company is expected to achieve net profit of 12 million, 181 million and 467 million in 16-18 years (before adjustment, 107 million, 167 million and 446 million respectively), corresponding to EPS of 0.01,0.13 and 0.34 yuan, downgraded to "overweight" rating.
