Core viewpoints

The performance is in line with expectations. In the first three quarters, the company achieved operating income of 1.096 billion yuan, an increase of 21.3% over the same period last year. The net profit attributable to the parent company was 51.17 million, up 22.4% from the same period last year, and 0.17 yuan per share, of which the operating income in the third quarter was 380 million yuan, up 30.1% from the same period last year. The net profit attributed to the parent company was 13.91 million, up 26.2% from the same period last year, and earnings per share was 0.05yuan. The main reason why the profit growth rate in the first three quarters was slightly higher than the revenue growth rate was due to the decrease in financial expenses and the increase in non-operating income.

With the rapid development of overseas markets, the adjustment of product structure has pulled down the comprehensive gross profit margin. The company's rapid development of overseas markets has made its revenue maintain high growth on the basis of declining demand in the domestic car market. according to the data in the first half of the year, the proportion of income from export products reached 64.95%, up 8.84% from the same period last year. In the first half of the year, the "annual production of 35000 tons of automobile high-performance brake disc project" and the "annual production of 800000 sets of brake pliers project" were put into production, and the products are oriented to European and American markets. As a result, the proportion of exports is expected to increase further, while exports are mainly oriented to the foreign post-market, and the gross profit margin is low, thus pulling down the company's comprehensive gross profit margin.

The devaluation of RMB leads to an increase in exchange earnings and a decrease in financial expenses. The company's financial expenses in the first three quarters were 2.94 million, down 85.7% from the same period last year, and the financial expense rate was-1.2%, down 1.9% from the same period last year. The main reason is that the RMB depreciated sharply in the third quarter, the company's export revenue increased, and at the same time, it was denominated in US dollars. As a result, a large amount of exchange gains were obtained. The financial expenses in the third quarter were-5.13 million, and the financial expense rate was-1.3%, down 4 percentage points from the same period last year.

The gradual release of production capacity of fund-raising projects will further increase profits, and the further expansion of che Yi'an business is expected to be the catalyst. In the first half of the year, the "annual output of 35000 tons of automobile high-performance brake disc project" and the "annual production capacity of 800000 sets of brake clamp project" were put into production. The products are in strong demand in Europe and the United States, and the company will further increase the company's profits after the completion of capacity climbing; the company has established Longji Dongyuan Industrial M & A Fund, which is expected to infiltrate other post-market business, and the stickiness of users of che Yi'an business is strong, and it is expected to obtain a larger market space after the market.

Financial forecasts and investment suggestions

It is predicted that the EPS for 2015-2017 will be 0.23,0.28,0.36 yuan (due to the decline in vehicle demand affecting product sales, the original profit forecast is 0.26,0.33,0.41 yuan). Comparable to the company's choice of car networking, Internet insurance, post-market and other companies related to the company's business, the unique post-market model of che Yi'an is expected to gain more space in the after market space, and the company's average valuation in 2015 is 106 times. Give the company a multiple valuation of PE110 in 2015, with a target price of 25 yuan, and maintain its buy rating.

Risk hint

The production progress of the joint venture company is lower than expected, and the degree of market implementation after che Yi'an is lower than expected.