Events:
The income of Central Asia shares in the first half of 2017 was 331 million yuan, up 6.41 percent from the same period last year; the operating profit was 103 million yuan, up 14.17 percent from the same period last year; and the net profit from home was 87.63 million yuan, up 13.68 percent from the same period last year. The growth rate of the downstream industry is relatively low, the company accounts for more than 80% of the market in the yogurt sector, and revenue growth has slowed down. The company has become the king in the dairy field, and will upgrade and transform the supporting stock equipment in the future. at the same time, it will actively expand the back market, do large-scale in the same customer, achieve steady growth, and be cautiously recommended for the first time.
Comments:
1. Downstream demand is gradually saturated and income growth slows down.
17H1 revenue increased by 6.41% over the same period last year, gross profit margin was 44.6%, and accounts received in advance was 520 million yuan, an increase of 31% over the same period last year.
Among them, the fastest growing business is accessories and others, and the most obvious contribution is intelligent packaging equipment.
1) the income of intelligent packaging equipment in the first half of the year was 248 million yuan, accounting for 74.67%, an increase of 5.24% over the same period last year; the gross profit margin was 46.83%, down 2.86% from the same period last year. Among them, automatic filling and sealing equipment accounts for about 50%, and downstream applications mainly include dairy products and beverages. The company is mainly middle and high-end equipment, the equipment is also relatively expensive, the standard of foreign enterprises, mainly do import substitution, the company's equipment efficiency performance and foreign standard, but the price can be 30% cheaper. At present, the market share of equipment in yogurt companies can reach 80% MUE 90%, while dairy products are slightly lower. In addition, the proportion of intelligent packaging equipment is about 16%. At present, the proportion of manpower in the dairy industry is very high, but with the increase of labor costs and the difficulty of management in the off-peak season, the demand for mechanization will increase. Therefore, there is some room for development in this business.
2) the income of plastic packaging products in the first half of the year was 49.14 million yuan, accounting for 14.83%, an increase of 3.84% over the same period last year, and the gross profit margin was 25.32%, down 2.92% from the same period last year. The business mainly provides plastic packaging products for the dairy factories of Mengniu, Yili and other enterprises, and the performance is closely related to the sales of dairy products.
3) Accessories and other products: the revenue of accessories and other products in the first half of the year was 34.56 million yuan, accounting for 10.43%, an increase of 20.35% over the same period last year, and the gross profit margin was 56%, which was basically the same as the same period last year. The business is mainly aimed at the production and maintenance of fragile and consumable parts, with rapid growth, but the overall growth has been relatively slow in the past few years and the relative base in the same period last year is also relatively low.
2. Gross profit is under pressure due to the change of sales structure
The 17H1 comprehensive gross profit margin was 44.6%, down nearly 2.5% from the same period last year, mainly due to changes in the sales structure, and the equipment gross profit margin confirmed during the reporting period was relatively low.
The net profit of home ownership was 87.63 million yuan, an increase of 13.68% over the same period last year, which was higher than the growth of income, mainly due to the increase in the net income of investment in Optoelectronics and Huijie Intelligence. 17H1's three fees totaled about 507.9 billion, with sales accounting for 15.32 percent, down nearly 1.3 percent from the same period last year. Of this total, sales expenses were 22.68 million yuan, up 12.99% from the same period last year; management expenses were 30.21 million yuan, down 10.28% from the same period last year; and financial expenses were-2.1 million yuan, down 14.29% from the same period last year.
3. Actively seek the coverage of technological innovation for the first time and prudently recommend rating. For companies with dairy products as the main downstream industry, paying attention to technological upgrading and innovation plays a vital role in their future development. According to the current point of view, the growth rate of the dairy industry is basically single-digit, the growth rate is slow, in the short term, the overall downstream market space is relatively limited, the future main demand will appear in the upgrading of inventory equipment. For example, with the intensification of competition, dairy giants will do more competition in taste and other aspects, such as reducing the time of high-temperature antivirus in order to maintain a better taste, in this case, the hygiene requirements for filling are higher than they are now. there is a need for smart packaging equipment to upgrade. This requires the company to pay attention to innovation and research and development for a long time in order to obtain the future market.
Invest in optoelectronics and gathering intelligence. The company announced on January 5, 2017 that it had completed the capital increase and equity transfer of Ningbo Zhongwu Optoelectronic Sterilization Technology Co., Ltd., with a total investment of 24.4 million yuan. Ningbo Zhongwu Optoelectronics, relying on the military-to-civilian high-tech company established by the Chinese Academy of Engineering Physics, is the first domestic company to independently develop pulsed bright light sterilization technology, which can be used to replace traditional food and packaging sterilization technology. High efficiency, fast (nanosecond), broad spectrum, environmental protection, no obvious temperature rise, flexibility and other characteristics.
The investment will provide strong technical support for the research and development of aseptic packaging equipment and other equipment in the future.
At the same time, the company also announced on January 5 this year that it had invested 6 million yuan in Hangzhou Huizu Intelligent Technology Co., Ltd., which was transferred to engage in the research and development of related equipment. The two active investments in technology R & D enterprises demonstrate the company's efforts in technological innovation. It is worth mentioning that the company has added a new aseptic equipment line this year and has completed two projects with a unit price of about 18 million and a gross margin of about 60%. At present, there are orders on hand.
Central Asia shares are in the leading position in the field of intelligent packaging equipment for dairy products in China. The company's intelligent packaging equipment is the main source of the company's business income, and it has maintained a very good relationship with customers over the past years, although the demand for strong production capacity has not been strongly expanded in the short term downstream. However, the intensified competition in the dairy industry and food safety requirements make the equipment continue to upgrade, and the stock equipment has a strong demand for upgrading. The company has been the king in the dairy field, and in the future, we will actively expand the later market and do large-scale in the same customer, which will achieve steady growth. We forecast that the company's 17-18 net profit is 187 million and 247 million, respectively, and the current corresponding PE is 29.2 and 22.1 times, respectively.
4. Risk hint: sales growth in downstream industries slows down.