Event: the company releases its annual report for 2015
Company announcement: in 2015, the company achieved operating income of 203.163 million yuan, up 0.27% over the same period last year; operating cost of 85.7009 million yuan, down 3.09% from the same period last year; net profit of 79.9803 million yuan, down 5.35% from the same period last year; deducting non-net profit of 73.6209 million yuan, up 0.40% from the same period last year. Among them, the results in the fourth quarter became the bright spot for the whole year, with single-quarter operating income reaching 74.0037 million yuan, an increase of 26.82 percent over the same period last year, and net profit of 27.0988 million yuan, up 42.42 percent over the same period last year.
Comments: the growth rate of performance is synchronized with that of the industry, and car networking will become a growth point.
Performance growth is affected by the slowdown in industry growth, and product penetration has not improved significantly for the time being.
According to the company's annual report in 2015, the company's CAN bus product revenue accounts for 88% of the company's main revenue, and is increasing year by year, so the growth rate of CAN bus product revenue determines the growth rate of the company's operating income to a large extent. At present, the company's CAN bus products are mainly used in domestic large buses, with a market share of more than 40%, but the promotion speed in the truck field is slow, and it is more difficult to enter the passenger car market.
According to data released by the China Association of Automobile Manufacturers, in 2015, domestic production and sales of large buses were 85729 and 84531 respectively, up 2.68% and 0.33% year-on-year, and continued to maintain a low growth rate. Buyers (mainly local bus companies) do not have a strong willingness to buy vehicles equipped with CAN bus products for cost reasons, resulting in slow growth of CAN bus product penetration, which is currently maintained at about 40 per cent. By contrast, the penetration rate of CAN bus products in the European and American large bus market has reached 100%. However, we believe that CAN bus products are of great significance in monitoring vehicle driving conditions and ensuring driving safety, and the recent frequent bus safety accidents will urge bus companies to pay more attention to traffic safety, so the permeability of CAN bus products still has room for improvement.
The company's future strategy: with the help of car networking products, from manufacturer to service provider
The development strategy of the company's annual report clearly mentions the development of a car-connected cloud bus system. At present, the company's car networking products are still in the technological development stage, and it is expected to complete the development and testing of the products within 2016, and start marketing from the fourth quarter of 2016.
We believe that the company has an inherent advantage in developing and promoting vehicle networking products. Through the organic combination of the company's CAN bus products and vehicle networking products, and through the data platform built by the company, the company can fully realize data mining, fine management and driving safety monitoring, and realize value-added services for customers. At the same time, it has gradually changed from the provider of CAN bus products and vehicle networking products to the service provider of vehicle management. More importantly, the company's deep cultivation of CAN bus products has accumulated a large number of local bus company customer resources, which is conducive to the promotion of car networking products and related services. At the same time, with the improvement of downstream customers' requirements for the company's products and services, the company does not rule out strengthening the company's technical reserve and R & D capability in the field of car body safety control through self-building teams or acquisitions.
For the first time, the company was given an "overweight" rating.
As the leading enterprise of domestic large bus CAN bus products, the industry position and market share are expected to remain stable for a long time. In the company's car networking strategy, the company will make use of the unique advantages of current products and markets to rapidly promote vehicle networking products and services, and gradually realize the strategic transformation from manufacturer to service provider. Although the short-term valuation is on the high side, we are optimistic about the company's deep accumulation and long-term development potential in the field of large bus body electronics. It is predicted that the EPS from 2015 to 2017 is 0.74,0.77 and 0.82 yuan respectively, and the corresponding PE is 74.8,71.0,67.2times. For the first time, the company was given an "overweight" rating.
Risk tips: the macro-economy continues to decline; the speed of new product research and development and promotion is not up to expectations.
