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The company released three quarterly reports, from January to September 2017, the company achieved operating income of 4.505 billion yuan, a decrease of 22.68% over the same period last year, and a net profit of 122 million yuan, down 73.22% from the same period last year. Among them, the operating income in the third quarter reached 2.226 billion yuan, an increase of 19.15 percent over the same period last year and 58.65 percent over the previous quarter; the net profit returned to the mother was 60 million yuan, down 63.04 percent from the same period last year and a big increase of 268.16 percent over the previous year. The year-on-year growth rate of revenue changed from negative to positive, and the return net profit increased greatly compared with the previous quarter, and the year-on-year decline was better than that in the first quarter (- 66.67%) and the second quarter (- 89.51%), transmitting the warming signal of new energy bus sales.

Main viewpoints

1. Sales increased sharply in the third quarter, and the performance gradually improved compared with the previous quarter.

Since 2015, the company has shifted its strategic focus to the new energy bus market, firmly seizing the development opportunities of new energy, and rapidly increasing its market share. A total of 18000 buses were sold in Zhongtong in 2016, of which 14000 were new energy buses, accounting for 77.8 percent, accounting for nearly 12.0 percent of the new energy bus market, ranking second in the industry. Therefore, the sales of new energy buses have a significant impact on the performance of the company.

Due to the decline in subsidies, the increase of 30,000 km requirements for non-individual users, and the early purchase of cars at the end of 2016, sales of new energy buses by major car companies generally fell sharply in the first half of 2017 and began to improve gradually in the third quarter.

In the first three quarters, ZTO Express sold a total of 12938 passenger cars, an increase of 10.59% over the same period last year, which was higher than the growth rate of the industry. Of these, 6472 units were sold in the third quarter, accounting for 49.97 percent. The company's sales of new energy buses in the first three quarters were about 3827, accounting for 29.6%, mainly due to the impact on the volume of new energy buses in the first half of the year.

In the first three quarters, the company realized operating income of 4.505 billion yuan, down 22.68% from the same period last year, and realized net profit of 122 million yuan, down 73.22% from the same period last year. Among them, the operating income in the third quarter reached 2.226 billion yuan, an increase of 19.15 percent over the same period last year and 58.65 percent over the previous quarter; the net profit returned to the mother was 60 million yuan, down 63.04 percent from the same period last year and a big increase of 268.16 percent over the previous year. The year-on-year growth rate of revenue changed from negative to positive, and the return net profit increased greatly compared with the previous quarter, and the year-on-year decline was better than that in the first quarter (- 66.67%) and the second quarter (- 89.51%), transmitting the warming signal of new energy bus sales. As a new energy bus leader, the company is expected to continue to improve its performance and sales volume in the fourth quarter and 2018 with the warming of the industry.

two。 Layout growth, new energy logistics vehicles open up new space for development

From the process of developing new energy buses, the strategic adjustment of the company is more flexible. In the face of the limited space for the long-term development of the bus market, the company actively expanded the business of new energy logistics vehicles. In the first half of the year, the company signed a strategic cooperation agreement with the Innovation Alliance to promote new energy logistics vehicles, and began shipping in July. As of September, the monthly output has climbed to more than 1000.

The market prospect of new energy logistics vehicles in China is broad, but the existing models are mainly contract manufacturing mode, and the products are weak.

Bus enterprises have entered the logistics vehicle industry on a large scale, and have obvious competitive advantages over existing players in automobile manufacturing and three-electricity matching. The integration of passengers and goods in the field of new energy commercial vehicles, vehicle collectivization is our focus area, the gradual landing of logistics vehicle orders to help the company profit improvement and growth space to open again, is expected to form Davis double-click.

3. Investment advice:

The company is a leading enterprise of new energy bus, and new energy products account for a large proportion. In 2018, the new energy subsidy policy is stable, the company's sales are expected to improve significantly, and the performance is more flexible. At the same time, the company adopts a positive strategy in the field of new energy logistics vehicles, which is expected to form a new performance growth pole. We estimate that the company's 18-year EPS will be 0.43 EPS 0.92 yuan, and the corresponding PE will be 13 times that of 28 amp, recommended rating.

4. Risk Tips:

The sales of new energy buses are not as expected, and the business progress of new energy logistics vehicles is not as expected.