Core viewpoints
Profitability continued to improve in the first half of the year: the company achieved revenue of 260 million yuan in the first half of the year, an increase of 12% over the same period last year, and a net profit of nearly 62 million yuan, an increase of 31% over the same period last year. Gross profit margin increased from 30.6% of 4Q15 to 34.6% of 1Q16 and 36.3% of 2Q16. The reason for the increase of gross profit margin lies in the optimization of product structure, the improvement of technological process and so on.
Intelligent power controller business continues to improve, product structure is further optimized: LIN bus intelligent power controller will grow at a high speed in the next 2-3 years, the unit price of LIN bus intelligent power controller is several times that of ordinary products, and the profit level is also higher than ordinary products, which will significantly enhance the company's market space and profitability. The company has also recently integrated Yunbo Technology, China's biggest competitor, and the competitive environment has been improved.
High-power diodes and wiper systems are expected to increase quickly: the company will complete refinancing in the second quarter for the annual production of 230 million high-power vehicle diodes and 36000 sets of new energy vehicle motors and control system industrialization. The high-power diode project will strengthen the company's vertical integration competitiveness in the field of rectifier and is expected to enter the international first-tier OE market. Yunrui Electric, a subsidiary, actively carries out intelligent motor and control system business, and actively grasps the general trend of automobile intelligence.
Enter the core of the power system of new energy vehicles: the drive motor system of new energy vehicles will reach a market scale of nearly 100 billion yuan. Through the combination of outsourced motors and independent R & D controllers, the company integrates the electric control system of motors and provides an integrated supply mode to highlight the technical and cost advantages in the competition. Yunyi is originally the main manufacturer of intelligent power controller in power system, working closely with major vehicle manufacturers, we believe that the company will gain strong competitiveness in the field of motor electric control of electric vehicle power system.
Financial forecasts and investment suggestions
We forecast the company's earnings per share from 2016 to 2018 to be 0.50,0.67 and 0.77 yuan respectively (the original forecast is 0.48,0.65 and 0.74 yuan). According to the comparable company, we give the company a valuation of 63 times Pmax E in 2016, corresponding to a target price of 31.50 yuan. Maintain the buy rating.
Risk hint
The development of new energy vehicles is lower than expected; the certification cycle of high-power vehicle diode products is long; and the development of intelligent power controller has encountered bottlenecks.