Events:
According to the semi-annual report released by the company on August 18, the operating income of the company in the first half of 2016 was 1.305 billion yuan, an increase of 3.79 percent over the same period last year; the net profit attributed to the owner of the parent company was 38.2636 million yuan, down 20.07 percent from the same period last year; and the fully diluted EPS was 0.05 yuan. The company expects net profit from January to September 2016 to be 8000-85 million yuan, an increase of 5.08% Mel 11.65% over the same period last year. At the same time, the company announced that it had received the intended order from Valeo, which intended to give the company a contract order of not less than 12000-18000 tons per year in 2017-2021 (not less than 9000 tons in 2011-2016).
Main points:
1. The medical cleaning business suffered a seasonal loss, with 700 million orders on hand. The company's net profit in the first half of 2016 decreased by 20.07% compared with the same period last year, mainly due to the operating income of 55 million yuan in the first half of 2016, 8.46% of the annual target and the total profit of-19.19 million yuan. we believe that Longmai's operating performance in the first half of the year is a normal seasonal fluctuation, which does not affect expectations for the whole year. With the end of the new version of GMP certification, the domestic pharmaceutical equipment industry has entered a period of capacity adjustment, and the decline in market demand has led to a downturn in the industry. The company takes the initiative to adjust its sales strategy in response to changes in the industry: focusing on middle and high-end pharmaceutical enterprises, focusing on strengthening the development of clean general contract engineering business. As of June 30, Shanghai Langmai has abundant orders on hand, reaching 723 million yuan, and we expect the company to achieve its annual performance commitment of 87.9 million yuan without worry.
two。 The aluminum processing business maintained a reversal trend, and the newly signed large orders demonstrated its strength. In the first half of 2016, the aluminum processing business achieved an operating income of 1.25 billion yuan, 53.19% of the annual target, and a total profit of 59.37 million yuan. The sales of automobile materials in Changshu factory reached 20400 tons, an increase of 11.5% over the same period last year. Xinheyuan sold 3747 tons, accounting for 62.45% of the annual plan. The major intention contract information announced by the company and the China Daily at the same time reflects the remarkable results of the infiltration of aluminum processing business into the automotive industry, and proves the recognition and competitiveness of the company's products among customers in the automotive industry. The annual purchase volume of Valeo, which won the bid, increased by 33-100%, a significant marginal increase compared with the company's sales of 36000 tons of automotive materials in 2015. As far as we know, Valeo's customers include most of the world's well-known traditional and new energy vehicle factories (including Volkswagen, BMW, Daimler, Honda, Volvo, Tesla, Inc., etc.). The company's large customer intention order will significantly promote brand awareness and future performance.
Conclusion:
We estimate that the EPS of the company from 2016 to 2018 will be 0.26 PE 0.33 PE 0.42 yuan, corresponding to 37 times 2016. After the establishment of the "aluminum processing" + "big health" development strategy, the company has implemented a series of mergers and acquisitions and related business layout, reflecting a strong willingness to transform and execute. We are optimistic that the company will continue to deepen the business layout related to big health through extension and other ways in the future, and the company's China News has also proposed project search and resource reserves that will promote the transformation in the field of medicine and health. The three-year fixed increase completed in April this year provides sufficient cash support for the company, and the fixed price increase of 7.88 yuan per share also constitutes a strong safety margin for the stock price. We maintain a highly recommended rating for the company with a target price of 13 yuan.