Discussion and suggestion:
Thanks to the improvement of business performance and the rebound in overall demand downstream, the company's operating flat glass consumption increased significantly in the first half of 2016, while benefiting from the recovery of the photovoltaic industry, the company is too capable of operating sales and a substantial increase in profits. Both An and B shares are recommended.
In the first half of the year, the company realized an operating income of 4.23 billion, an increase of + 27.24% in YOY, and a profit of 424 million yuan, an increase of 127% over the same period last year. On a quarterly basis, the company's 2016Q2 realized employment income of 22.8 yuan, YOY increased by 28%, realized profit of 2.6 yuan, and YOY increased by 112%.
The sharp increase in the company's performance is mainly due to the low base period in the same period last year, while the market climate in the first half of 2016 picked up sharply, mainly from the flat glass and energy consumption industries. (1) the quality of flat glass products remained stable in the first half of the year, with the main cost naturally reduced by 0.5 yuan, which greatly improved the profitability of the products. The gross profit margin was 21.99% and your profit increased by 10.7 percentage points. At the same time, it was affected by the high boom of the real estate industry in the first half of the year, and the sales of flat glass products were good. In the first half of the year, the sales price was 15.7 yuan, YOY increased 24.94%, recorded profit was 2.1 yuan, and YOY increased by 4369%. (2) another bright spot of the company is that in terms of energy consumption, due to the continuous recovery of the whole photovoltaic market in the first half of the year and the strong demand, the company realized 12.6 yuan in sales of energy products and increased its YOY by 103%. Through the research and development and application of new industries, the material and power consumption on production facilities decreased significantly, and the cost was reduced. The gross profit margin of energy products reached 28.4% and increased by 15.6%, with a record profit of 1.98 yuan. YOY has increased by 3323%. At present, the proportion of revenue and profit of the company has reached 30% and 43%, respectively, compared with 18.63% and 2.62% in the same period last year.
Looking forward to the future, from the perspective of the industry: at present, the company has a complete enterprise in all industries, and at the same time, it has the mutual benefit of each other. while it is based on the technical field of the glass industry, it has made great efforts to develop too much energy, and has been gradually extended to the terminal application field of the development of photovoltaic power stations. Qianhairen, the company's largest shareholder, once again increased its stake in A shares by 1.61% in the second quarter, with the shareholding ratio reaching 21.78%, which further demonstrates the optimism about the company's future development prospects.
We believe that the company has rebounded at the beginning, and the company will gradually improve due to the continuous increase in the demand for downstream real estate and energy industries, as well as the improvement of the company's cost control and technology research. We expect the company to make a profit of 1.01 billion yuan and 1.21 billion yuan respectively in 2016 and 2017, and the EPS is 0.49 yuan and 0.58 yuan, respectively, corresponding to 25 times and 21 times the E of A-share stocks, respectively. The company's current valuation is reasonable.
