The company achieved revenue of 1.279 billion yuan in the first three quarters of 2017, an increase of 30.66% over the same period last year, and a net profit of 348 million yuan, an increase of 21.24% over the same period last year.

The volume and price of container plates have risen, and the revenue has continued to rise sharply: the company's Q3 revenue is 547 million yuan, an increase of 52.46% over the same period last year. Excluding the impact of the consolidation of Xinhua Chang in April this year, the caliber income still increases by more than 30% over the same period last year. Mainly due to the continuous warming of container manufacturing demand, the company's container board business ushered in a simultaneous rise in volume and price, and the production capacity of 200,000 cubic bamboo-wood composite container board production line was gradually released in the second half of the year. The growth of the company's box board sales continued to accelerate in the third quarter. It is estimated that the sales volume is expected to increase by more than 70% compared with the same period last year, the box board price has increased by more than 10% compared with the same period last year, and the box board business income has achieved rapid growth.

Performance still maintained steady growth, and structural adjustment led to a decline in gross profit margin and an increase in sales expense rate:

The company's Q3 attributed net profit was 117 million yuan, an increase of 26.71% over the same period last year, which still maintained steady growth, while the lower income growth rate was mainly due to a decline in profitability. Q3 gross profit margin was 33.15%, down 6.24 pct from the same period last year. The main reason for the decline was that the profit margin of its traditional floor products was low, and the company also purchased some of its products from Xinhuachang due to the shortage of floor production capacity. Second, more production capacity is allocated to the box board, and the proportion of environmental protection board business with higher gross profit margin has declined. At the same time, because the container plate products need to bear the transportation cost, the sales expense rate increased by 2.11% compared with the same period last year.

Box board production capacity release superimposed prosperity upward performance is guaranteed, and there is broad room for expansion and growth: downstream container manufacturing continues in a high manner, the company's floor order scheduling is tight, and the subsequent 200,000 cubic bamboo-wood composite container board production capacity is gradually released. Box board business performance growth is guaranteed. At the same time, the company's environmental protection board business is now actively laying out and cultivating the market (affected by the allocation of production capacity this year, sales have declined), the company's OSB environmental protection board has outstanding performance, complies with the upgrading of civil plate consumption, and has a broad growth space after the capacity problem is solved. at the same time, the layout of the wood structure field is also expected to become another new growth point.

Investment advice: maintain the "buy" rating: the company's container floor business benefits from the recovery of the industry, superimposed capacity is expected to increase significantly, at the same time, there is a broad space for the growth of environmental protection boards, and the layout of wood structure is expected to become a new growth point. We expect EPS to be 0.48,0.62,0.81 yuan respectively from 2017 to 2019, corresponding to the latest closing price PE valuation of 21,16,12 times respectively, maintaining the "buy" rating.

Risk tips: downstream container demand has fallen sharply, raw material prices have risen sharply.