The company released its 2017 interim report. The company achieved revenue of 816 million yuan in the first half of the year, an increase of 5.70% over the previous year, an increase of 5.70% over the previous year; the net profit returned to the mother was 52.1299 million yuan, an increase of 131.85% over the previous year, and EPS was 0.046 yuan/share.
Optimizing cost control and management, the volume and price of the motor business have risen sharply
In terms of NdFeB magnetic materials, the company promoted cost control and management, increased the development of high-performance products, further adjusted the product structure, and steadily improved operating efficiency. In the first half of the year, NdFeB products recorded revenue of 438 million yuan, a year-on-year decrease of 5.36%, and gross margin reached 18.99%, an increase of 3.42% over the same period last year. In terms of motor series products, it continues to maintain a healthy development momentum, increases research and development efforts, expands the market for new high-end products, and its profitability is growing steadily. The volume and price of motor series products rose sharply in the first half of the year, with revenue reaching 273 million yuan, an increase of 31.21% over the previous year, and gross margin of 30.40%, an increase of 3.12% over the same period last year.
Equal internal and external emphasis is placed on the customer base. Many leading companies have sold rare earth permanent magnet materials in China at 55%, Southeast Asia 21%, Europe 18%, and the other 6%. End users include well-known companies such as Apple, Samsung, BYD, Philips, Yutong, etc.; motors currently have a production capacity of more than 5,000 varieties of more than 4 million units, with major customers spread across more than 40 countries including Asia, North America, and Europe; the company developed a first-generation domestic three-dimensional warehouse in 1985, and has now developed into one of the largest domestic logistics equipment and technology integrated manufacturers. It has now developed into one of the largest logistics equipment and technology integrated manufacturers in China. There are more than 300 logistics projects, spread across 27 provinces, municipalities, and autonomous regions across the country and exported overseas. Users include Haier, Mengniu, Yili, etc.
Adhere to favorable policies and accelerate industrial transformation and upgrading
Rare earth permanent magnets are new materials and high-tech products encouraged by the national industrial policy; the country's industrial policy favors high-end and intelligent equipment manufacturing, while automated three-dimensional warehouses and intelligent fire fighting equipment are on the list; the rise of new energy vehicles will also provide huge market space for the company to develop electric power battery packs and motor drive systems for new energy vehicles. The company makes full use of raised capital and its own capital to focus on building a “control technology+motor” precision manufacturing industry platform, building a “components+equipment+engineering” industrial ecosystem through system integration, and vigorously developing business fields such as magnetic materials and drive systems for NEV motors, fire robots, and simulation training systems.
Profit forecast and investment rating: We forecast that the 2017-2019 EPS was 0.10 yuan/share, 0.16 yuan/share, and 0.23 yuan/share, respectively, corresponding to 2017-2019 PE 70 times, 46 times, and 31 times, respectively. The company's industrial layout is good. With the amount of new energy vehicles released in the second half of the year, the production of the company's main products may increase significantly. Future performance can be expected and raised to the “increase in holdings” rating.
Risk warning: falling product prices, risk of policy changes
