Company announcement: the company announced that in the first three quarters of 2017, the operating income was 1.053 billion yuan (+ 53.84% compared with the same period last year); the net profit attributed to the shareholders of the parent company was 20 million yuan (+ 257.50%); and the non-return net profit was 13 million yuan (+ 149.94% compared with the same period last year). Basic earnings per share is 0.02 yuan (year-on-year + 300.00%). Benefiting from the growth of railway vehicle sales, the company's performance has increased significantly.
Truck year-round bidding increased compared with the same period last year, and the company's vehicle business rose. At the beginning of 2017, the Railway General Administration invited 40000 trucks, and the freight cars in the industry have ushered in a relatively prosperous stage in recent years. The company is qualified for the supply of trucks, benefiting from the large-scale bidding of trucks at the beginning of the year, and its performance has greatly increased in the first three quarters. At the same time, the freight volume rose 9.2% in September compared with the same period last year, and the freight volume in the first three quarters rose 14.60% compared with the same period last year. The demand downstream of trucks is optimistic, and the demand will continue to rise steadily in the future.
The medium-and long-term trend of the railway industry is upward, and the company's main business continues to benefit. At present, the company has the ability to produce high-speed train axles, 350 km / h and 250 km / h EMU axles have completed operation assessment and technical evaluation, and achieved small batch supply, accelerating the process of localization of EMU axles.
During the relatively peak period from 2018 to 2020, the company is expected to benefit from the strong demand for bullet trains due to the trend of line encryption and speed increase of high-speed rail.
Profit forecast and investment suggestion: the company has the production capacity of 180000 railway axles, 5000 railway freight cars, 30,000 railway wheelsets and 5000 pillow side frames. Especially in the professional development and production of railway axle products, it has irreplaceable advantages of domestic manufacturers in the same industry.
It is estimated that the company's EPS from 2017 to 2019 will be 0.03 EPS 0.03 won 0.04 yuan, which will be rated as "overweight".
Risk tips: railway fixed asset investment is lower than expected; orders dropped sharply, and so on.