Main points of investment:
1. Event
According to the company's third-quarter report for 2017, the company's total operating income in the first-third quarter was 1.079 billion yuan, an increase of 52.86 percent over the same period last year. The net profit belonging to shareholders of listed companies was 77.3465 million yuan, down 26.68 percent from the same period last year.
two。 Our analysis and judgment
The financial expenses increased a lot in the first three quarters, and we are optimistic about the annual performance.
The company's revenue grew rapidly in the first three quarters of 2017, mainly from two aspects: (1) the price of crude oil fluctuated around US $50 / barrel, and the company's overseas business expansion was smooth. The overseas EPC project is carried out according to plan, and the revenue is confirmed; (2) the pressure of environmental protection promotes the implementation of the domestic coal to gas policy, the company's natural gas pipeline gas transmission business grows rapidly, in addition, with the gradual promotion and operation of the company's filling stations, the company's natural gas filling business revenue scale is gradually expanded.
The financial expenses of the company in the first three quarters increased by 1112.59% over the same period last year, mainly due to: (1) the appreciation of the RMB has caused more exchange losses to the company since the beginning of this year, of which 15.6 million yuan was lost due to exchange rate changes in the first half of the year. The further appreciation of the RMB in the third quarter led to an increase in the company's exchange losses; (2) the company set aside interest on corporate bonds, resulting in a greater increase in financial expenses.
In addition, the stock price of Andong Group held by the company has declined more since the beginning of the year, with a fair value change income of-34.12 million yuan.
3. Investment suggestion
It is estimated that the EPS of the company in 2017-2019 will be 0.18, 0.22, 0.29 yuan, PE is 32-25-19 times; the company will benefit from the recovery of the oil and gas market in the future, we are optimistic about the company's overseas market development potential, the future performance is expected to achieve sustained growth, and maintain the "recommended" rating.
4. Risk hint
International oil prices continue to decline, overseas project progress is lower than expected, exchange rate fluctuation risk, environmental protection and pipeline inspection and maintenance business development is lower than expected.
