Main points of investment
The net profit of Hong Kong Machinery reached a record high of + 41.3%. The company disclosed its 2017 annual report on March 30th, with a total income of 21.86 billion yuan,-10.2% year-on-year, and a net profit of 300 million yuan, + 41.3% over the same period last year. + 76.5% year-on-year.
In addition, the company plans to distribute 0.5 yuan (including tax) in cash to all shareholders for every 10 shares, and use the capital reserve fund to increase 2 shares for every 10 shares. From a sub-sector point of view, the company's port machinery revenue is 13.12 billion yuan,-23.2% compared with the same period last year, accounting for 60.0% of the company's total revenue. It is worth noting that the company's port machinery gross profit margin reached 24.24%, a record high, fully reflecting the company's market bargaining power of port machinery products, as well as the positive impact of factors such as the promotion of automated terminals. Company heavy equipment, steel structure, "construction-transfer"
The income of the project section is 3.38 billion, 1.52 billion and 1.55 billion yuan respectively, all of which achieve an increase of more than 50%, reflecting the improvement of the overall prosperity of the company's business. The revenue of bulk parts is 1.62 billion yuan,-48.8% compared with the same period last year.
Once again, taking into account large asset impairment, the three rates have reduced the company's 2017 gross profit margin by 17.6%, compared with 2016-1.4pct, mainly due to the higher gross profit margin of the port machinery business accounted for a lower proportion of revenue. The total expense rate of the three items is 12.0%, which is somewhat optimized compared with the same period last year. This is mainly due to the decrease in the financial expense rate due to the increase in exchange earnings. It is worth noting that although the company's asset impairment loss in 2017 totaled 820 million yuan, a decrease of 400 million yuan compared with 2016, it still had a great impact on the company's performance. In addition, the company's asset-liability ratio of 75.1%, year-on-year + 2.2pct, is mainly due to the increase in long-term and short-term borrowing. The company's monetary funds reached 5.77 billion, an increase of 2.17 billion yuan over 2016, mainly due to the recovery of accounts receivable and the reduction of external payments. it is expected that the increase in monetary funds will have a positive impact on the development of the company's PPP and other businesses.
Hong Kong machinery world leader, 2018 revenue, orders are expected to reverse the company's Hong Kong machinery products have been the first in the global market share for 19 consecutive years, occupying a well-deserved dominant position. Due to the obvious post-trade cycle nature of Hong Kong machinery, the downturn in global trade in 2015-16 led to a decline in Hong Kong machinery orders in 2016-17, with newly signed contracts of US $2.52 billion in 2017, down 3.7 per cent from the same period last year. On the one hand, the recovery of the global economy has brought about an obvious trend of recovery in the overall market. on the other hand, the market demand for port machinery and equipment will be driven by such factors as the demand for new ports along the "Belt and Road Initiative" route, the construction of shipping centers and free trade ports, the upgrading and upgrading of port automation, and the demand for renewal. It is expected that the order and revenue of Hong Kong machinery will be reversed in 2018. At the same time, the company has increased the development of spare parts and other business since the new Terminexus company was established at the end of 2017, which is expected to have a positive impact on the company's performance in 2018 and beyond. It is suggested that we should focus on the new changes in the port machinery business.
Adhering to the strategic guidance of "one body and two wings", the performance has stepped into the development strategy of the rising channel company, which points out that on the basis of "equipment manufacturing" as the Noumenon and "capital operation" as one wing, it helps the extension of the port machinery business industrial chain, helps to build the whole industry chain of marine engineering and offshore wind power, and takes "Internet" as a wing to improve the company's operational efficiency. At present, the prosperity of the Hong Kong machinery market is rising, and the marine industry market has ushered in a recovery under the continued strength of oil prices. PPP, maritime transport and installation markets and other businesses are expected to continue to provide profit support for the company, while under the circumstances that the output of sea wages is relatively clear, we expect the company's performance to have entered the upward channel.
Profit forecast and investment suggestion
The company has been in an absolute leading position in the port machinery industry, coupled with the vast market space for automatic terminals and port machinery spare parts, under the condition that the marine industry has been cleared more fully, and the prosperity of the marine industry has rebounded, and other sectors have gone hand in hand, we expect that the company's performance has entered the upward channel. It is estimated that the company's net profit in 2018-20 is 507 million, 805 million, 1.21 billion yuan, corresponding to EPS0.12, 0.18,0.28 yuan, corresponding to PE44, 28, 19x. Maintain a "buy" rating.
Risk hint: the post-machine market development of Hong Kong is not as expected and the recovery of global trade is lower than expected.