Event: annual report released, annual revenue (1.624 billion,-17.99%), return to the mother net profit (187 million,-39.58%). The set-top box business, which accounts for nearly 50% of revenue, suffered a sharp decline in year-on-year profits and a small loss, which was the main reason for the decline in the company's annual performance in 2017.
The gross profit margin of military business is as high as 51.19%, transforming into private military industrial enterprises: under the adverse background of military reform, ① 's military business revenue has increased by 4.87%; ② has completed 42 military independent R & D projects; in 2017, ③ focused on developing military business areas, and the industrialization project of intelligent mechanical and electrical equipment and management system has invested a total of 10.0687 million yuan. Zhang Hong, former chairman of ④ Tongzhi Electronics, became general manager of Galaxy Electronics on July 20, 2017.
Set-top box revenue for the first time less than 50%, will be transferred to the new company independent operation: in 2017, the company issued a total of more than 3.5 million set-top boxes, a big drop compared with the previous year. Revenue fell 23.74% year-on-year, and gross profit margin fell 9.75%. During the 2017 reporting period, the company established Jiangsu Yinhe Digital Technology Co., Ltd. for the newly registered set-top box business, and then gradually transferred the set-top box business from the parent company to the new company for independent operation and independent accounting.
The revenue of the new energy vehicle business accounts for less than 10%, and 2017 falls short of the promised performance: in 2017, the revenue of the new energy vehicle business accounted for 9.66%, down 29.25% from the same period last year; and the gross profit margin fell 14.28% from the same period last year. Fujian Junpeng 2017 performance commitment of 95 million yuan, actual net profit of 84.101 million yuan, Jiasheng Power 2017 performance commitment of 40 million yuan, actual net profit of 16.4473 million yuan. Mainly due to the reduction of customer demand due to the adjustment of subsidy policies in the new energy vehicle industry.
Xu Li transformed military industry + new energy, and R & D investment increased by more than 20%. In 2017, R & D investment was 129 million yuan, an increase of 20.34% over the same period last year. The actual use in 2017 raised 327 million yuan for the construction of new energy vehicle key components industrialization project, new energy vehicle air conditioning system industrialization project, intelligent mechanical and electrical equipment and management system industrialization project and R & D center construction project; investment suggestion: with the acceleration of army armored vehicle replacement during the 13th five-year Plan period, we expect the company to maintain a growth rate of about 15% in the next 2-3 years. From 2018 to 2020, the EPS is 0.19, 0.22, 0.25 yuan, respectively, and the corresponding PE is 35.3, 30.4, 26.4 times. Taking into account: the gross profit margin of ① military products is relatively high; ② 's early R & D investment continues to increase, and the first rating gives the Buy-An investment rating, and the 6-month target price is 8.00 yuan.
Risk tips: ① military business affected by the policy is not as expected; ② new energy vehicle industry competition intensifies; ③ project construction is not up to expectations.
