Events:
According to the third quarter report of 2017 released by listed companies, the company's operating income in the first three quarters of 2017 was 232 million yuan, an increase of 25.81 percent over the same period last year, while the net profit of shareholders belonging to listed companies was 40.44 million yuan, an increase of 40.85 percent over the same period last year. The EPS is 0.297 yuan.
The company issued a forecast of annual operating results, and the net profit of shareholders belonging to listed companies is expected to be 4526-53.5 million yuan in 2017, with a change of 10% 30%.
Viewpoint:
Performance growth is higher than expected and will continue to grow at a high level in the fourth quarter.
In the semi-annual report, the company estimates that the net profit of shareholders belonging to listed companies from January to September 2017 will vary from 3100 yuan to 36 million yuan, with a range of 10% 25%. The actual net profit of shareholders belonging to listed companies is 40.44 million yuan, an increase of 40.85% in real terms, which is higher than the performance forecast in the semi-annual report.
According to the company's historical operating conditions, the fourth quarter is still a high point of income. From the financial situation of a single quarter, the year-on-year growth rate of net profit from the second quarter of 17 years is higher than that of revenue, and this gap increased significantly in the third quarter, indicating that the company's profitability has been significantly strengthened, and operating income and net profit have entered a significant upward channel. In addition, from the level of the company's gross profit margin and net profit over the years, there is also a trend to enter the upward channel, and it is expected that the company's fourth-quarter results will still exceed expectations again.
The high-speed steel bimetal saw blade industry has a broad space, and the company enjoys the industry dividend by virtue of its strong technical strength.
In 2013, the total sales volume of China's high-speed steel bimetal band saw blades reached 50 million meters, with a sales amount of about 2.25 billion yuan. Under the premise of no major changes in the domestic economic fundamentals and the current situation of the industry, the bimetal band saw blade industry is expected to maintain a growth rate of about 15% in the next 3-5 years, and the sales volume is expected to reach 84 million meters in 2018. According to the average price of 45 yuan per meter, the total sales volume will reach 3.78 billion yuan, and the industry has a broad space.
The company is mainly engaged in the research and development, production and sales of bimetal band saw blades and its related products. In the cemented carbide band saw blade market, it has long been occupied by international well-known saw blade enterprises by virtue of technological advantages, and the company relies on scientific research and technological advantages. with international competitive strength. The company's "AA" trademark has been recognized as "China's well-known trademark" and has been awarded the title of "2015 National Industrial Brand training demonstration Enterprise" by the Ministry of Industry and Information Technology. By virtue of its technical strength, the company has not only gained a rise in volume and price at home, but also expanded year by year in the international market. as of the latest statistics, foreign income has accounted for 20% of the total income, and strong technical strength is the guarantee for the company to enjoy the industry dividend.
Flexible dealer model paves the way for the company's product expansion.
The company mainly sells bimetal band saw blades through the dealer model. at present, the marketing network covers most regions of the country, such as East China, North China, South China, Southwest, Northwest, Northeast, Central and South, and the key cities in each region have offices. There are more than 260 dealers in the country.
The company mainly provides technical support and after-sales service to dealers through the office, forms a long-term mutually beneficial business relationship with dealers, wins a good reputation among dealers and end users, and paves the way for the expansion of the company's products in the future.
Investment advice and rating:
We estimate that the company's operating income from 2017 to 2019 will be 333 million yuan, 433 million yuan and 605 million yuan respectively, and its net profit will be 55 million yuan, 73 million yuan and 103 million yuan respectively, and the earnings per share will be 0.40,0.52 yuan and 0.74 yuan respectively, corresponding to 68x, 52x and 36x respectively, with a "recommended" rating for the first time.
Risk Tips:
Industry demand is lower than expected and capacity growth is not as expected.