In 2013, the company realized operating income of 2.83 billion yuan, up 3.46% from the same period last year; operating profit was 65.74 million yuan, down 48.87% from the same period last year; net profit belonging to the parent company was 114 million yuan, down 6.46% from the same period last year; non-net profit belonging to the parent company was 52.02 million yuan, down 52.46% from the same period last year. The profit distribution plan is to increase 6 shares for every 10 shares and pay out 1 yuan (including tax).
Among them: operating income in the fourth quarter was 1.164 billion yuan, up 92.06% over the same period last year; operating profit was 23.77 million yuan, down 1.38% from the same period last year; net profit belonging to the parent company was 42.56 million yuan, up 29.94% from the same period last year; and earnings per share was 0.11 yuan based on the latest share capital.
In 2013, downstream demand declined, the company's product sales declined and revenue increased slightly. In 2013, the demand for railway truck axles and vehicles declined, and the company's revenue slightly increased by 3.46% to 2.83 billion yuan compared with the same period last year, of which: the revenue from axles was 579 million yuan, down 1.42% from the same period last year; the income from vehicles was 707 million yuan, down 8.83% from the same period last year; and the income from vehicle accessories and other vehicles was 1.063 billion yuan, down 4.08% from the same period last year. The income of other businesses reached 482 million yuan, an increase of 81.77% over the same period last year, which is the main reason for the revenue growth. In terms of sales volume, the company sold 140600 axles in 2013, down 0.42% from the same period last year; wheelset sales of 12400 sets, down 57.44% from the same period last year; vehicle sales of 2311 units, up 9.01% from the same period last year; and 3424 pillow side frames, up 9.39% from the same period last year.
Axle price increases gross profit margin increases, comprehensive gross profit margin declines. The company's comprehensive gross profit margin fell 0.39 percentage points to 10.91%, of which: axle prices increased, gross profit margin increased by 4.53% year-on-year to 12.22%; vehicle gross profit margin was 13.84%, down 2.81%; vehicle matching and other gross profit margin was 11.02%, down 1.95% from the same period last year; other business gross profit margin was 4.81%, an increase of 2.56% over the same period last year.
The government subsidizes 82.5 million to improve performance. In 2013, the company received a government subsidy of 82.5 million yuan, and its non-operating income reached 83.44 million yuan, an increase of 177% over the same period last year. The sharp increase in non-operating income has narrowed the decline in the company's profits.
The company will benefit from the company's upward revision of its annual railway investment plan. In 2013, railway investment in fixed assets totaled 663.8 billion yuan, slightly higher than the planned 660 billion yuan. According to relevant news, in 2014, national railway fixed asset investment will reach 720 billion yuan, an increase of 8.5 percent over the same period last year; new lines will be put into production of more than 7000 kilometers, an increase of more than 25.3 percent over the same period last year, up from 700 billion yuan and 6600 kilometers deployed at the National Railway work Conference at the beginning of the year. Driven by the growth of railway investment and the reform of the railway investment and financing system, the demand for railway transport equipment is expected to grow steadily and the company will benefit.
It is expected that new products such as high-speed car axles will become new performance growth points. The company has completed the high-speed car axle process research, process verification and other work. Through the technical scheme review of the expert group of the Railway Corporation, the company's products have been assembled in a small amount on the domestic EMU and entered the loading test stage. After entering the mass production of high-speed car axles, the company will benefit from the rapid growth of China's bullet train demand and form a new performance growth point. In addition, the company's C80ERF2 new heavy-duty truck axle has been put into mass production; the world's heaviest 40-ton axle axle has been delivered smoothly; the design of the vehicle exported to Pakistan has been completed and approved by the customer; the American SCT company has completed the trial production of 110t reinforced pillow, reduced weight side frame, 70t improved bolster and other products, and passed the dynamic and static load test. The grate sheet of municipal solid waste incinerator has been trial-produced and passed the technical appraisal. The R & D and commissioning of new products will become a new profit growth point for the company, and lay the foundation for the further expansion of the international market.
The company's business plan for 2014, production and sales increased significantly. According to the business plan announced by the company, 214000 axles (including axles for wheelsets and railway vehicles), 50, 000 sets of wheelsets, 3500 railway vehicles and 5940 pillow side frames were produced and sold in 2014. The year-on-year growth rates were 35%, 306%, 51% and 73%, respectively. We believe that it is difficult to complete the company's plan under the current demand situation.
Earnings forecast and rating: we expect earnings per share from 2014 to 2016 to be 0.35 yuan, 0.45 yuan and 0.59 yuan respectively. Based on the latest closing price, the corresponding dynamic price-to-earnings ratio is 36 times, 28 times and 22 times respectively, maintaining the company's "overweight" investment rating.
Risk hint: the risk that the investment of railway freight cars is not up to expectations, and the risk that new product research and development is not as expected.