The company's revenue in 2017 increased by 0.70% over the same period last year, and its net profit decreased by 4.62% compared with the same period last year.
On March 22, the company released its annual report for 2017: the business income in 2017 was 2.459 billion yuan, an increase of 0.70% over the same period last year; the net profit of returning to the mother was 84.58 million yuan, equivalent to 0.30 yuan of fully diluted EPS, a decrease of 4.62% over the same period last year; and the net profit of non-return was 91.78 million yuan, up 7.09% from the same period last year, and the performance was lower than expected.
Judging from the split in a single quarter, the company's 4Q2017 achieved operating income of 642 million yuan, an increase of 0.81% over the same period last year, which was less than 11.61% of 3Q2017 growth. 4Q2017 achieved a net profit of 32 million yuan, a decrease of 43.86% over the same period last year, while the company's 3Q2017 net profit increased by 167.52%.
There is a large decline in the company's 4Q2017 performance, mainly due to a large drop in welfare costs caused by the company's layoffs in 2016, and a rebound in labor costs this year, resulting in a large increase in management expenses.
The comprehensive gross margin decreased by 0.16 percentage points, and the expense rate increased by 0.89 percentage points during the period.
The company's comprehensive gross profit margin in 2017 was 19.23%, down 0.16 percentage points from the same period last year.
In 2017, the company's expense rate during the period was 13.52%, an increase of 0.89% over the same period last year, of which the sales / management / financial expense rate was 2.12% / 11.31% / 0.09% respectively, representing a change of 0.19 / 1.36 /-0.65 percentage points over the same period last year.
The influence of the traditional business circle still exists, and the future growth space may be in doubt.
The company's ZTE headquarters is still one of the most competitive stores in Taiyuan Street, a traditional business district in Shenyang, with a slight increase in revenue in 2017. However, the influence and prosperity of Taiyuan Street Business District in Shenyang is facing greater competitive pressure compared with Zhongjie and other emerging business areas. coupled with the fact that the company is not up to expectations in terms of cost control, there may be doubts about the growth space for future revenue and performance.
Downgrade profit forecast to "overweight" rating
From the perspective of 2017, the company's cost control level is lower than we expected, which also directly restricts the company's future growth expectations. We correspondingly downgraded the company's forecast for fully diluted EPS from 2018 to 2020 to 0.32 / 0.34 / 0.36 yuan (previously 0.47 / 0.50 / 0.52 yuan) and downgraded to "overweight" rating.
Risk Tips:
The growth rate of consumer demand fell short of expectations, and the risk of major shareholders reducing their holdings.