Core ideas:
The pressure of price reduction brought about by the decline of state subsidies has dragged down the company's gross profit margin. The stable performance in the first three quarters was affected by the decline of state subsidies. The price of the company's electronically controlled products has dropped by about 15% to 20% compared with the beginning of the year. Accordingly, the company's gross profit margin in the first three quarters fell to 39.3% from 44.1% in the same period last year. However, the company paid premium by deepening existing customers and actively opening up new customers, and the overall performance was still relatively stable. In the first three quarters, the company achieved operating income of 443 million yuan, an increase of 2.54% over the same period last year, and a net profit of 107 million yuan, an increase of 0.94% over the same period last year. Among them, the revenue in the third quarter was 149 million yuan, down 14.92% from the same period last year, and the net profit from home was 36 million yuan, down 5.78% from the same period last year.
As the company strengthened its cost control, the company's gross profit margin rebounded in the third quarter compared with the previous quarter. The decline in the price of electronic control products brought about by the state subsidy and recession at the beginning of the year was mainly in the second quarter, and since then the product price has been basically stable. Under the impact of price reduction, the company's quarterly gross profit margin fell to 359% in the second quarter from 45.7% in the first quarter, but since then, as prices have been basically stable and the company has strengthened product cost control, the company's quarterly gross margin has rebounded slightly to 37.2% compared with the previous quarter. With the arrival of the traditional peak season of production and sales in the fourth quarter, it is expected that the company's gross profit margin in the fourth quarter may further improve compared with the previous quarter.
Buses are expected to resume growth next year, and the company's performance flexibility for commercial vehicles is greater. As the subsidy accounts for a large proportion of the total vehicle price, the short-term impact of subsidized decline this year is greater. We estimate that the production and sales of new energy buses for the whole year will be about 80,000 million, down more than 30% from the same period last year. We expect that the national subsidy adjustment pressure of new energy buses next year will be less than that of this year, so buses are expected to usher in restorative growth. We estimate that the production and sales of new energy buses will be about 100,000 to 120,000 next year.
At the same time, with the gradual promotion of electric replacement of logistics vehicles, new energy logistics vehicles are still expected to maintain high growth next year. The company's electronic control downstream customers are mainly new energy buses and new energy logistics vehicles, such as the new energy commercial vehicle industry to achieve rapid growth next year, the company's performance flexibility is relatively large.
It is estimated that the company's EPS in 2017-2019 will be 0.82,0.98 and 1.16 yuan, respectively. We predict that the company's EPS will be 0.82,0.98 and 1.16 yuan in 2017-2019, and the current share price is 35 times, 29 times and 24 times corresponding to PE. The company has greater flexibility for the performance of new energy commercial vehicles, while new energy buses are expected to resume growth next year, and logistics vehicles are expected to continue to grow at a higher level, so the company's "buy" rating is maintained.
Risk hint
The production and sales of new energy vehicles are lower than expected; the company's electronic control shipments are lower than expected; and the company's industrial control is lower than expected.