The results of the three quarterly reports are in line with the scope of the previous forecast, and the annual performance outlook is slightly lower than expected.
The company achieved revenue of 1.87 billion in the first three quarters of 2017, down 6.23% from the same period last year; the net profit belonging to listed shareholders was 12.0975 million yuan, up 26.31% from the same period last year, which was in line with the range of 12 million-16 million yuan in profit forecast; among them, the net profit attributed to listed companies in the third quarter was 10.2858 million yuan, which decreased in the third quarter compared with the second quarter, but the net profit since the second quarter continued to turn positive. The annual performance outlook ranges from 2500 yuan to 40 million yuan, an increase of 48.63%, 137.81% over the same period last year, which is slightly lower than our previous forecast.
The results of the three quarters were slightly lower than expected, which was due to the preparation period of major customers' products and brought about an increase in costs.
We can see from the tracking situation of the company that since the beginning of this year, the company has strengthened its cooperation with major customers. as an important supplier partner of XIAOMI, the company has been working with XIAOMI's ecological chain company. for its OEM mobile power supply, ant intelligent camera and other products, we expect to upgrade to OEM for XIAOMI's core products (such as mobile phones, etc.). Gross profit in the third quarter decreased slightly from 11.53% to 10.79% in the same period last year, but increased slightly from the second quarter, due to the preparation period for new products for major customers, and the fluctuation in operating profit was due to the increase in related fees brought about by new business.
The problems left over by history have been digested, a new starting point of management has emerged, and we are optimistic about the deepening of cooperation between the company and major customers.
The original actual control of Zhuoyi Technology is Tian Yu and Xia Chuanwu. In July 2013, Xia Chuanwu became chairman of the company. During this period, Tian Yu reduced his holdings many times, Xia Chuanwu increased his holdings many times, and the actual controller of the company was changed to Xia Chuanwu. During this period, a number of senior executives of the company also actively participated in the increase of holdings. The problems left over from the history of the company's equity have been solved. at the same time, the company announced the draft equity incentive in September 2017, which also demonstrates the confidence of high growth in future performance. The company's customers cover large brands at home and abroad; years of experience in manufacturing and automation has laid the foundation for the company to develop intelligent manufacturing, which is conducive to the company's ability to develop flexible manufacturing. As an important strategic partner of XIAOMI, we expect to upgrade to OEM for XIAOMI's core products (such as mobile phones, etc.) in the future.
The leading direction of mainland EMS has not changed, which meets the needs of industry development and maintains a "buy" rating.
The company has strong ability and obvious characteristics in the field of intelligent manufacturing, and the domestic mobile phone industry chain also needs an EMS leading enterprise supporting services in the mainland. In the future, with the breakthrough of tapping the potential of major customers, and considering the development potential of the optoelectronic industry, we expect the company's main business to continue to improve, and the company is obviously at an inflection point. We slightly lowered our 17-year profit forecast to 38 million yuan (the previous value was 55 million yuan, mainly according to the three quarterly reports, lowered the annual income growth and gross profit margin of network communication terminals and portable consumer electronics in 2017), maintained the profit forecast for 18-19 years, estimated EPS of 0.07,0.37,0.58 yuan for 17-19, maintained 35-40 times PE valuation for 18 years, maintained the target price of 12.95-14.8 yuan, and continued to recommend Maintain the buy rating.
Risk hint: the improvement of intelligent manufacturing efficiency is lower than expected, the order of intelligent hardware products is lower than expected, and the progress of optoelectronic industry is lower than expected.