Event
The company released its 2017 results KuaiBao, with revenue of 3.414 billion yuan, an increase of 25.23% over the same period last year, and a net profit of 144 million yuan, down 15.84% from the same period last year.
Brief comment
Elevator business development is facing severe challenges
The company is one of the leading enterprises in the domestic elevator control system industry. during the reporting period, the market business of elevator control products is affected by the industry market and other factors, the development is facing more severe challenges, and the profit level is declining. We believe that the intensified competition in the elevator control product market has led to a decrease in revenue. The company's overall profit margin is low and needs to be improved.
The robot business is growing fast, and it is expected to reduce costs and increase profits after integration.
The company is one of the leading companies in the domestic robot and motion control industry, and it is also the largest servo system channel seller in China. it includes four major companies: Zhongwei Xing (sports robot), Xiaoao Xiangrong (car welding), Zhishan intelligent control (servo drive) and Huitong technology (sales channel). During the reporting period, the company's motion control and robot product business continued to maintain growth, combined with the domestic industrial robot and motion control development trend, the company continues to increase investment in motion control and robot product business research and development, market layout and so on. The sales of the core products (home-made robot bodies) exceeded 1000 units in half a year, and the key business goal of "sales of self-made robot bodies will continue to double (1600 units) on the basis of breaking through 800 units (sets) in 2016" is expected to be successfully achieved.
In the future, with the formation of the scale effect of the company's robot and the synergy effect of the integration of the four major subsidiaries, it is optimistic that the company's robot business will reduce costs and increase profits and thicken the company's performance.
Advanced energy-saving and industrial transmission enterprises, a huge marketing network ensures that the high gross profit continuous company independently develops and produces all kinds of high and low voltage industrial frequency converter products, with a gross profit of 48.41%. It is the largest channel agent specializing in servo system and other motion control equipment sales and service in China, and it is also the world's largest channel agent for Panasonic servo system products in Japan. Huitong Technology, a subsidiary of Huitong Technology, has a large sales network and more than 7000 downstream application customers, helping to maintain high gross margins and further expand its market share.
It is estimated that in 2018-19, the EPS of the company will be 0.40,0.51 yuan respectively, and the corresponding PE will be 28 times and 22 times respectively.
Risk Tips:
1) the cost reduction is lower than expected; 2) the elevator business market environment is further deteriorating; 3) the production expansion progress of robot products is not as expected.