Report guide
The company released its 2017 results KuaiBao on February 28. During the reporting period, the company realized operating income of 3.0214641 billion yuan, an increase of 1.62% over the previous year; operating profit of 96.2024 million yuan, an increase of 140.71% over the previous year; and net profit belonging to shareholders of listed companies was 58.532 million yuan, an increase of 53.22% over the previous year.
Main points of investment
The company has maintained high growth for two consecutive years, with both endogenesis and extension.
The announcement shows that the company has maintained its way of increasing revenue and reducing expenditure and fine management since 2016, while stripping off its baggage assets and making a breakthrough in transforming its business. Therefore, the company's performance is expected to maintain a high growth of more than 50% in 2017 on the basis of a high increase of 77% in 2016, which fully shows the achievements of the company's management and the firm implementation of the transformation. In addition, the company recently announced that it wants to acquire a controlling stake in Guangdong Hongqiang, a high-tech enterprise engaged in electronic functional materials such as protective film, release paper and UV light-cured adhesive film business, indicating the company's development path of both endogenesis and extension.
The company's growth is in line with expectations, reducing the burden and profit in the long run.
Although the performance in the current announcement is lower than our previous profit forecast, we believe that the difference from our forecast is mainly due to the increased efforts to dispose of non-performing assets that the company began to reflect in its mid-2017 report. We assume that the company continues to dispose of some bad receivables and sluggish inventory in the fourth quarter of 2017, which means that the company will start operating lightly in 2018. Give the current new management team a better business environment, coupled with the completion of the employee stock ownership plan announced on January 16 and the transfer of part of the shares of the actual controller to the new management on February 14th, the interests of the company's management and core team will be closely tied to the company's future performance.
Profit forecast and valuation
We estimate that from 2018 to 2019, the company will achieve revenue of 5.609 billion yuan and 6.781 billion yuan, net profit of 160 million yuan and 233 million yuan, and EPS0.19 yuan and 0.28 yuan respectively. We believe that the company is at a turning point in its development and will have a high growth rate in the future, giving it a "overweight" rating.
Risk hint
The order of testing fixture is lower than expected, the progress of photovoltaic supply is lower than expected, and the sales volume of data terminal is lower than expected.