Investment suggestion
Longji Machinery announced that 1Q16 achieved operating income of 417 million yuan, an increase of 43.38% over the same period last year, a net profit of 24.31 million attributable, an increase of 3.6% over the same period last year, and a deduction of 23.56 million of non-net profit, an increase of 66.3% over the same period last year.
Considering that the stock price of the company has been greatly adjusted in the early stage, the risk has been fully released, and the market C2b2B after the transformation of the company is also expected to bring new growth points to the company's business. We upgraded the company to the recommended rating and maintained the target price of 17 yuan, corresponding to the 2016 94x Pmax E.
Reason
1Q orders increased, revenue and deducted non-net profit increased significantly. Due to the increase in the number of orders, 1Q revenue increased by 43.38%, gross profit margin was flat, 0.6ppt decreased slightly compared with the same period last year, sales expense rate and management expense rate decreased by 1.3pptCompact 1.4pptM1Q operating profit increased 54% compared with the same period last year, due to the high base in the same period last year. (the difference between fair value and book value when the company set up Elsevier with assets resulted in 8.59 million non-operating income.) as a result, the net profit of returning home increased by only 3.6% compared with the same period last year.
Benefited from the rebound in exports and heavy truck sales: the company's exports accounted for more than 50%, and is expected to benefit from the devaluation of the RMB in the future. With the gradual recovery of domestic truck sales, especially heavy truck sales, the company's domestic business will also maintain steady growth. In the early stage, the company has completed the rights issue, and the financial cost of the company is expected to decline further in the future. In the same period, the company forecasts that the growth rate of the company's performance in the first half of the year will be between 0% and 30%, and the company's performance growth will continue to pick up.
Invest in Auto change net, layout future transformation: the company already holds 37.09% stake in Che Yi net, which has paved the way for the company's future business transformation. In the future, the company will realize the company's business transformation by cutting into the automotive aftermarket C2b2B chain, transforming the company's business from the traditional heavy truck brake hub and overseas AM market to the post-market business of domestic light assets operation, helping the company's business to better transform and upgrade.
Profit forecast and valuation
We slightly raised the company's 2016 Compact 17-year net profit forecast to 69 million / 79 million, with an adjustment of 8.5% and 12% respectively.
Risk.
Che Yi net continues to lose money.