Main points of investment:
The results in the three quarters are in line with expectations. The first three quarters achieved revenue of 3.019 billion yuan (YoY-17.94%) and net profit of 105 million yuan (YoY+29.55%), which is basically in line with market expectations. Among them, the revenue in the third quarter is 948 million yuan (YoY-22.42%,QoQ-3.01%), the net profit is 47.7242 million yuan (YoY+76.36%,QoQ + 45.92%), and the net profit is 17.9967 million yuan (YoY-29.60%). The substantial increase in the company's performance in the third quarter is mainly due to the receipt of government subsidies of 26 million.
With the relocation of capacity and fluctuations in raw material prices, the company's performance is still growing steadily. At present, the company has the production capacity of 4.75 million all-steel tyres and 6 million semi-steel tyres, of which 4 million all-steel tyres are in the stage of capacity relocation. After the completion of the relocation, it will have the production capacity of 5 million all-steel tyres and 10 million semi-steel tyres. The relocation will add 4 million semi-steel tire production capacity to be gradually put into production. As the company is mainly all-steel supporting, the customer structure is simple, the price of raw materials fluctuated sharply in the first quarter, the company's performance still maintained steady growth.
A large proportion of major shareholders participate in the fixed increase, demonstrating the long-term value of the company. The company's non-public offering was approved by the CSRC on September 21, and the proportion of the major shareholder Shuangxing Group subscribing for the total number of shares in this final offering is not less than 23.38%, maintaining the current proportion, and other funds are not publicly issued to the market. The initial price of the issue is 6.33 yuan per share, which indicates that the company is optimistic about the long-term development of the company.
Industrial 4.0 intelligent chemical plant gradually reached production, brand output both increased. The company's global model and market innovation center and the global technology and demand innovation center (including the global graphene tire R & D center) have been fully completed and put into operation; the commercial tire full process industry 4.0 intelligent chemical plant has reached full production. Passenger tire full process industry 4.0 intelligent chemical plant is also about to be fully put into production, adding 4 million of semi-steel tire production capacity by the end of the year and next year step by step into production.
The industrial M & A fund will be terminated and the long-term plan for industrial integration will not be changed. Although the company's participation in the establishment of Qingdao Star Micro Equity Investment Fund was terminated, and before the signing of an equity sale agreement between Xingwei and Jinhu, in the future, the company will still focus on domestic and foreign tires, automobiles and related industries at home and abroad to look for opportunities for industrial integration, increase domestic and foreign mergers and acquisitions, and promote global layout.
Profit forecast and investment rating: the intelligent model factory has been completed and put into production, and the level of net interest rate is expected to increase gradually. it is expected to integrate high-quality resources at home and abroad and become a new tyre giant in China. To maintain the increased rating and profit forecast, it is estimated that the EPS in 17-19 is 0.23,0.39 and 0.45 yuan respectively, corresponding to 27,16,14 PE in 17-19.
Risk tips: fierce competition in domestic and foreign markets, industry integration is not up to expectations, market development is not up to expectations.