Revenue grew by 3.55% in the first three quarters of 2017, and net profit increased by 604%.
The company's sales revenue in the first three quarters was 872 million yuan, an increase of 3.55% over the same period last year, and its net profit was 158 million yuan, a year-on-year increase of 604%. The company's revenue in the third quarter alone was 297 million yuan, down 22% from the same period last year, and its net profit was 56 million, up 97% from the same period last year. Revenue fluctuated in the third quarter due to the policy shutdown caused by the BRICS meeting in Xiamen and the traditional off-season impact of red and yellow light. Overall, the company's performance growth in the first three quarters was better than the market expected.
The substantial increase in performance in the first three quarters was mainly due to the improvement in capacity utilization and the significant increase in gross profit margin, so the performance growth exceeded revenue growth.
The company's gross profit margin in the first three quarters was 36%, up 21pct, 18%, and 15pct, mainly due to the gradual mass production of the company's production capacity since the second half of 2016, but it has not yet reached production, so the capacity utilization rate is low. Since the beginning of this year, as the downstream demand continues to improve, the company's production capacity continues to be full production and process upgrading, significantly reducing the unit production cost of LED chips, while the company adjusts the product structure to increase gross profit products. As a result, the company's net gross profit margin has improved significantly this year, and its performance growth has far exceeded revenue growth.
Hejun Capital is stationed in the company, optimize the management structure and performance appraisal mechanism, fully stimulate the motivation of employees, work together, firmly expand and strengthen the main business of LED.
In November last year, Hejun Capital officially entered the company, and three core management staff, including the chairman, secretary and investment director, were stationed in the company successively. By optimizing the company's internal incentive mechanism and management structure, such as fully linking performance appraisal with income and other measures, the company successfully retained the core backbone and talents, and fully inspired the employees of the company to make concerted efforts to firmly expand and strengthen their own LED main business. Financial data from the first three quarters of this year show that remarkable results have been achieved. The production and marketing of the company's chip products have increased significantly, among which the blue-green light production capacity has increased significantly, from about 250000 / month at the beginning of the year to about 400000 / month. At the beginning of the year, the company announced an investment of 5 billion plus blue-green light, which is expected to achieve substantial expansion in 2019. The company continues to take the lead in the industry, with a market share of 30%. It was announced at the beginning of this year that it invested 900 million yuan to expand production. With the equipment gradually in place, it is expected that the production capacity will continue to be released from the end of this year to the beginning of next year.
Forecast 2017 net profit growth of 296%-358% over the same period last year, "overweight" rating
It is estimated that the company's net profit for 2017-2019 will be RMB 210x382, EPS 0.30max 0.41 and 0.54, corresponding to PE 30max 22 / 16 times, overweight rating.
Risk hint
The prosperity of the LED industry is not up to expectations.
