The net profit in the first quarter increased by 8.9%, and the performance was in line with expectations. In the first quarter, the company achieved operating income of 588 million yuan, an increase of 29.5% over the same period last year, operating profit of 19.05 million yuan, an increase of 3.8% over the same period last year, and a net profit of 17.62 million yuan belonging to the parent company, an increase of 8.9% EPS0.064 yuan over the same period last year. The performance growth was in line with expectations, and the net profit in the single quarter of 2011 turned positive for the first time after 11 consecutive quarters of year-on-year decline, which verified our judgment on the inflection point of the company's performance in 2014.
Traditional business has grown steadily, and high-power medium-speed machines have increased significantly. The inland shipping market has bottomed out and rebounded slightly since last year, the upgrading of fishing vessels has been accelerated under the drive of policies, and the company's traditional engine and generator set business is expected to grow by about 20%. The high-power medium-speed machine has a hand-held order of 390 million yuan by the end of 2013, and it is expected that the mainframe will deliver more than 34 million yuan in the first quarter. according to the order delivery cycle, it is expected to reach the delivery peak after the second quarter, and the mainframe business income is expected to reach 430 million yuan in 2014. it is expected to break even or make a small profit.
The comprehensive gross profit margin fell. During the reporting period, the comprehensive gross profit margin was 10.97%, down 1.39 percentage points from the same period last year. We believe that the decline in gross profit margin is mainly due to a substantial increase in fixed costs due to a sharp increase in fixed assets at the end of last year. In the future, as the delivery of mainframe increases, the effect of scale will lead to a slight increase in the company's gross profit margin.
Orders for large machines continue to increase, with orders expected to reach 800 million yuan this year. In the first quarter, the company received 44.238 million yuan in new orders for high-power medium-speed machines, compared with 40.72 million yuan in the same period last year, an increase of 10 percent over the same period last year, to 407.05 million yuan at the end of the first quarter. As China's law enforcement official ships, marine auxiliary ships, engineering ships and ocean-going ship construction will drive the rapid growth of the demand for large machines, the company's newly signed orders for large machines are expected to reach 800 million yuan in 2014.
Maintain the "buy-A" rating. It is estimated that the company's net profit from 2014 to 2016 is 109 million yuan, 158 million yuan and 202 million yuan, corresponding to EPS0.40 yuan, 0.57 yuan and 0.73 yuan. The company has 446 million yuan in cash and has a high margin of safety. As a company under the State-owned assets Supervision and Administration Commission of Shandong Province, it is expected to benefit from the acceleration of state-owned assets reform and maintain the "buy-A" rating. Corresponding to the dynamic price-to-earnings ratio of 30 times in 2014.
Risk hint. The delivery schedule of mainframe orders is lower than expected; the risk of rising prices of raw materials; the risk of projects under construction turning into fixed assets and the risk of increased depreciation expenses.
