Incidents:
The company released its three-quarter report on the evening of the 24th. In January-September, it achieved revenue of 881 million yuan, an increase of 40.47% over the previous year, and achieved net profit of 103 million yuan, an increase of 22.88% over the previous year. Net profit after deduction was 91.699 million yuan, an increase of 14.53% over the previous year.
Key points of investment:
Revenue accelerated further in the third quarter, and gross margin was under pressure from rising raw material prices
The company achieved revenue of 336 million yuan in the third quarter, up 88.85% year on year, down 4.82% month on month, and achieved net profit of 236.38 million yuan, up 73.6% year on year and 49% month on month. The company's gross profit margin for the third quarter was 33.26%, down 4 percentage points from the previous quarter. The main reason was the sharp rise in steel prices since 17 and losses in the new energy vehicle business.
The recovery of the coal machine business will continue until 18 years, and the trend of improving the company's performance will not change
Since the third quarter, coal prices have fluctuated slightly, and the profits of coal companies have continued to improve dramatically, which fully guarantees the sustainability of capital expenditure growth for equipment. Judging from the order situation of coal machinery companies, production emissions are generally full, and we expect that the current round of bottoming out in coal companies' capital expenditure will continue until at least 2018. As a leading coal mining and tunneling machine company, the trend of continuous improvement in performance remains unchanged. The rise in raw material prices slowed down in the fourth quarter, costs were partially transferred, and performance is expected to increase significantly both month-on-month and year-on-year.
The NEV business still needs to be cultivated, and it is difficult to improve in the short term
In 2017, due to policy adjustments, the company made corresponding adjustments to the development of the NEV business, which slowed down the pace. It is expected that the company's performance will still be hampered in the short term.
Maintain the “Recommended” rating
Considering the impact of rising raw material prices on gross profit, the company's profit forecast was lowered. The company's EPS for 17-19 is expected to be 0.22, 0.33, and 0.39 yuan respectively, maintaining the “recommended” rating.
Risk warning
Risk of loss of capacity in the coal industry; equipment updates for coal companies falling short of expectations; risk of mergers and acquisitions.