Summary of the report:
Summary of the report: during the reporting period, the company achieved operating income of 645 million yuan, an increase of 39.81% over the same period last year; net profit of 13.3123 million yuan, down 1.09% from the same period last year; net profit of 3.3204 million, up 824.55% over the same period last year; and total assets of 3.854 billion yuan at the end of the reporting period, an increase of 4.68% over the same period last year.
The trend of the rail industry is upward, and the company's performance in the second quarter has improved by leaps and bounds. From January to July 2017, China's railway fixed asset investment totaled 380.491 billion yuan, up 2.9 percent from the same period last year. According to the national railway medium-and long-term plan, we expect that the investment for the whole year will reach 800 billion yuan, and the railway investment will be accelerated in the second half of the year. The urban rail is in operation in the first half of the year, and the mileage of traffic in the whole year will exceed 1000 km. The future is full of plans, and will maintain the trend of rapid development by 2020. The company realized operating income of 461 million yuan in the second quarter, an increase of 55.92% over the same period last year, and the net profit attributable to shareholders in the second quarter was 24.23 million yuan, an increase of 153.41% over the same period last year. The results increased significantly in the second quarter, and with the bottoming out of the rail transportation industry, the company's performance can be expected to continue to grow in the second half of the year.
The market share of railway axles is leading, and high-speed train axles are expected to make a breakthrough in the future. In the rail transit equipment manufacturing industry, especially in the railway equipment manufacturing industry, the company has accumulated strong technology and equipment strength through many years of operation, especially in the professional R & D and manufacturing of railway axle products. the technical level, product quality, production scale and market share have steadily ranked first in the domestic industry for many years, representing China's competitiveness in this field in the international market. The company's 350 km / h and 250 km EMU axles have successfully completed operation assessment and technical evaluation, and achieved small batch supply, and is expected to gradually expand market share in the field of bullet train axles in the future.
Profit forecast and investment suggestions: with the gradual recovery of the economic situation and the continuous improvement of the level of urbanization, the rail transit market will further develop, and the rail transit equipment manufacturing industry is expected to continue to present a good market prospect. The market share of the company's high-speed train axles is expected to increase, while the short-and medium-term demand side of trucks continues to improve. We expect the company's EPS to be 0.05x0.06x0.06 yuan in 2017-2019, maintaining the "overweight" rating.
Risk hints: railway fixed assets investment is not as expected; market competition intensifies; systemic risks often occur.