Events:
The company released its third-quarter report for 2017. The company realized operating income of 693 million yuan in the first three quarters, an increase of 5.82% over the same period last year, and a net profit of 351400 yuan (belonging to shareholders of listed companies), a decrease of 95.86% over the same period last year. Of this total, operating income in the third quarter was 178 million yuan, down 15.02% from the same period last year, and net profit (belonging to shareholders of listed companies) was 227100 yuan, an increase of 109.90% over the same period last year.
Comments:
The company's performance fell short of expectations. In the current period, the net profit belonging to shareholders of listed companies decreased by 95.86% compared with the same period last year, and the net profit belonging to shareholders of listed companies after deducting non-recurring profits and losses decreased by 108.20% compared with the same period last year. The decline is mainly due to the increase in labor costs caused by the company's increased talent incentives compared with the same period last year. In addition, it is affected by the repayment of accounts receivable, resulting in an increase in provision for bad debts by age. The net cash flow generated by the company's operating activities decreased by 64.38% compared with the same period last year, mainly due to the non-receipt of rebates for some security technology projects.
The company is the core enterprise of the group and the second academy leading the deep civil-military integration and industrial transformation and upgrading. The company intends to acquire two high-quality targets in the segment, and the new business may significantly enhance the company's earnings per share and drive the valuation center down. The company focuses on the development of security technology, medical devices and electronic information. This time, it is proposed to acquire two shares of Burke Xineng and Jingyi Planning, which are the leaders in the subdivision of high-end power supply and geographic information industry, respectively. This acquisition has entered the CSRC review stage. If the follow-up transaction is successfully completed, we expect that the performance commitment of the target company will be successfully realized. The acquisition may significantly boost the profitability of listed companies.
As the only listed company under the second Institute of Aerospace Science and Industry, the company has high-quality in-vitro assets and large space. The company is the absolute leader of the domestic air defense missile-- the holding listed company under the second Institute of Science and Technology, and the listed company still has a lot of assets outside the body. In 2015, the second Institute of Science and Technology achieved a total operating income of 30.031 billion yuan and a net profit of 2.812 billion yuan. The operating income and net profit were 34 times and 78 times that of listed companies in the same period, respectively. Under the trend of the group increasing support for the development of existing holding listed companies, we believe that the future asset integration process of listed companies is worthy of attention.
Maintain the original profit forecast and buy rating. It is predicted that the EPS of the company in 17-18-19 will be 0.22,0.29 and 0.41 yuan per share, respectively, and the current stock price corresponding to PE will be 83,63,45 times respectively. In the same period, the average PE of comparable companies with similar business with Aerospace Changfeng is 53, 39 and 25 times, and the current PE level of the company is on the high side compared with the industry average. However, in view of the fact that the company's current stock price is more than 40% lower than the reserve price of this issue (26.25 yuan), it has a certain margin of safety, and taking into account the expectation of asset integration of the second hospital in the future, the risk-return ratio is cost-effective, so it maintains the buy rating.