Report guide
The company released its 2017 performance forecast on January 24. The company's net profit for the full year of 2017 is estimated to be 56.0 million yuan to 65.00 million yuan, compared to 38.2012 million yuan for the same period last year, an increase of 46.59% to 70.15% over the previous year.
Key points of investment
The company has maintained high growth for two consecutive years, and the high growth rate will continue in the future
The announcement shows that the company has maintained open source savings and fine management methods since 2016, divested burdensome assets, and made a breakthrough in transforming the business. As a result, the company's performance is expected to continue to increase in 2017 from a 77% increase in 2016, which fully demonstrates the results of the company's management's efforts and the firm implementation of the transformation. Although the performance range in the current announcement is slightly lower than our profit forecast, we think it is clear that the company will maintain a high growth trend as long as it adheres to quality management, active marketing, and firm transformation.
2018 will be even better if companies increase their efforts to reduce the value of non-performing assets
We believe that the difference between the company's performance and our forecast is mainly due to the company's increased efforts to dispose of non-performing assets, which began to be reflected in the 2017 mid-year report. We assume that the company continued to step up its efforts in the fourth quarter of 2017. Just like the bad receivables and sluggish inventory that were previously announced, it instead means that starting in 2018, the company's operations will be lightly packed, giving the new management team a better operating environment. Coupled with the completion of the employee stock ownership plan announced on January 16, the interests of the company's management and core team will be tied to the company's future performance.
Profit forecasting and valuation
We expect the company to achieve revenue of 3,452 million, 5.609 million, and 6.781 million respectively in 2017-2019, net profit of 73 million, 160 million, 233 million yuan, EPS of 0.09 yuan, 0.19 yuan, 0.28 yuan, and CAGR of 82.75%.
We believe that the company is at an inflection point in its development and will have a high growth rate in the future, giving it an “increase in holdings” rating.
Risk warning
Testing fixture orders fell short of expectations, PV supply progress fell short of expectations, and data terminal sales fell short of expectations.