The company releases its quarterly report for 2017.
In the first three quarters, the company achieved operating income of 2.579 billion yuan, an increase of 38.07% over the same period last year, a net profit of 159 million yuan, an increase of 0.84% over the same period last year, and a non-return net profit of 137 million yuan, down 1.54% from the same period last year. The total net cash flow of the company's operating activities was 43.9167 million yuan, down 472.62% from the same period last year, mainly due to the growth of robot and operation control business during the reporting period, resulting in an increase in the advance payment of raw materials and an increase in the reserve of raw materials.
The company expects the 17-year net profit of returning home to be between 1.36 and 205 million yuan, an increase of-20 percent over the same period last year.
Brief comment
The growth rate of performance in the third quarter was lower than expected, and the competition in elevator business intensified.
The company achieved revenue of 957 million yuan in the third quarter, an increase of 13.96% over the same period last year, a net profit of 61 million yuan, a decrease of 10.85%, and a non-return net profit of 51 million yuan, down 25.26% from the same period last year. The growth rate of net profit was lower than expected. The company's gross profit margin in the third quarter was 23.52%, which was basically the same as in the second quarter (23.99%) and 2.2 percentage points lower than the same period last year. The net interest rate was 6.4%, 1.3 percentage points lower than the second quarter and 1.7 percentage points lower than the same period last year. We believe that the decline in revenue due to increased competition in the elevator control products market, as well as the low gross profit margin of Xiaoao Hengrong and Huitong Technology are the main factors for the lacklustre business in the third quarter.
Business operations and early mergers and acquisitions drive up financial expenses
From the perspective of expense rate, the three major expense rates in the third quarter increased significantly compared with the second quarter, and the financial expenses increased by 18.11 million yuan in the first three quarters. This is mainly due to the increase in working capital due to business growth during the reporting period, and the increase in equity payments due to mergers and acquisitions, resulting in an increase in bank borrowing and the corresponding increase in interest expenses.
Robot sales will achieve high growth this year, and the company is expected to reduce costs and increase profits after integration. It is one of the leading companies in the domestic robot and motion control industry, and it is also the largest servo system channel seller in China. It includes Zhong Weixing (sports robot), Xiaoao Hengrong (car welding), Zhishan intelligent control (servo drive), and Huitong technology (sales channel). The sales of the core products (home-made robot bodies) exceeded 1000 units in half a year, and the key business goal of "sales of self-made robot bodies will continue to double (1600 units) on the basis of breaking through 800 units (sets) in 2016" is expected to be successfully achieved. In the future, with the formation of the scale effect of the company's robot and the synergy effect of the integration of the four major subsidiaries, it is optimistic that the company's robot business will reduce costs and increase profits and thicken the company's performance.
It is estimated that in 2017-19, the EPS of the company will be 0.30,0.40,0.51 yuan respectively, and the corresponding PE will be 38 times, 28 times and 22 times respectively.
Risk Tips:
1) the cost reduction is lower than expected; 2) the elevator business market environment is further deteriorating; 3) the production expansion progress of robot products is not as expected.