Events:
According to the annual report of Xinzhu shares, the operating income in 2017 was 1.66 billion yuan, up 9.26% from the same period last year; the net profit of shareholders belonging to listed companies was 12.46 million yuan, down 15.94% from the same period last year; and the net profit was-151 million yuan, which was basically the same as that of the same period last year, with basic earnings per share of 0.02 yuan. In recent years, the company has actively laid out its rail transit business and successfully realized business transformation. at present, it is the only manufacturer of rail transit vehicles in China, with the laudatory name of small and medium-sized vehicles. in the future, it will fully benefit from the rapid development of multi-standard urban rail construction in the southwest and the whole country, with more than 8 billion rail orders on hand, and the transformation has been completely landed, waiting for the performance release and maintaining prudent recommendation.
Comments:
1. The company's revenue has increased slightly and the business transformation has been successfully realized.
The company achieved operating income of 1.66 billion yuan in 2017, an increase of 9.26% over the same period last year. Bing Q4 achieved operating income of 810 million yuan in a single quarter, accounting for 48.8% of the annual income, an increase of 35.86% over the same period last year. Most of the rail transit business is focused on delivery confirmation in the second half of the year. Look at it by product
1) the rail transit business income was 815 million yuan, an increase of 22.86% over the same period last year, accounting for 49% of the revenue, becoming the main source of revenue for the company for the first time. In the past 17 years, the scale of the company's rail transit business has increased significantly compared with the same period last year, surpassing the traditional bridge components business for the first time to become the company's largest business, which also marks the phased results of the company's business transformation. In 17 years, the company delivered the order for the track system of Chengdu Metro Line 2, realizing the first large-scale use of the new track system on the domestic tram line, and at the same time completing the trial of the new track system on the Guangzhou subway line, laying a good foundation for future development. The company currently occupies about half the market share of the Chengdu subway market, as well as all the tram market, according to public information, according to public information, the total amount of the project of Chengdu Metro Line 5-8-9, which won the bid for long passenger shares in a joint venture with Xinzhu shares, is about 7.5 billion yuan. Chengdu's tram Rong No.2 line is currently in the delivery period of vehicles and new tracks, and the Xinjin tram project, Dujiangyan tram and other projects are about to start. In 2018, the company's subway vehicles, tram Rong No.2 vehicles and new track systems are about to enter the delivery stage.
2) the operating income of the supercapacitor business was 117 million yuan, an increase of 62% over the same period last year, accounting for 7.02% of the revenue. In January 2015, the company bought 51% of the shares held by Wuxi Dasheng in Owei Technology with 153 million yuan in cash. Aowei is one of the leading supercapacitor companies in China, and successfully obtained the first domestic ECER100 certificate and ECER10 certificate, which is a scarce resource in the same industry in the world, which is currently held by only two companies in the world. The rapid growth of the company's supercapacitor product revenue in the past 17 years is mainly due to the rapid growth of orders for external trams, tunnel locomotives and new energy buses. With the continuous development of the company's rail transit industry, the supercapacitor business will also have a good synergy with the company's own products.
3) the business income of bridge functional components is 630 million yuan, an increase of 3.2% over the same period last year, accounting for 37.96% of the income.
The bridge functional components business of the company is the traditional main business of the company, and its comprehensive status is among the top three in the country. Some products can rank first in the country, but with obvious periodicity. It is greatly influenced by the state's investment in fixed assets and the national macroeconomic policy. During the 13th five-year Plan period, China's infrastructure construction investment will remain high, and this sector business is expected to bring sustained and stable income for the company in the next few years.
4) the operating income of the special automobile business was 8 million yuan, an increase of 5.32% over the same period last year, accounting for 0.48% of the income. In 2017, the company's new energy vehicle business is mainly based on the re-declaration of products. at present, eight models of the company's new energy vehicles have been announced, of which seven models have entered the promotion catalogue and now have the basis for large-scale promotion to the market. The company plans to introduce strategic partners in the new energy vehicle industry to jointly expand the new energy vehicle business, so that the company will focus more resources on the development of rail transit business.
2. The gross profit margin will remain stable and the future product structure will continue to optimize for 17 years. The company's comprehensive sales gross profit margin will be 20.02%, an increase of 0.65 percentage points over the same period last year. In terms of products, 1) the gross profit margin of rail transit business was 7.36%, a sharp increase of 2.36 percentage points over the previous year, mainly due to the increase in the proportion of high gross profit products such as trams and tracks with high independent intellectual property rights; 2) the gross profit margin of supercapacitor system was 42.46%, an increase of 6.56 percentage points over the same period last year. 3) the gross profit margin of the company's bridge functional components business was 31.54%, down 1.13 percentage points from the same period last year; 4) the gross profit margin of the special vehicle business was 5.32%, down 10.53 percentage points from the previous year.
In the future, the gross profit margin will be improved with the product structure. In recent years, the company has actively laid out the rail transit industry, laying out tracks, subway and multi-system rail transit vehicle systems, in which the company has self-control ability in trams, medium and low speed maglev trains, new rail systems and other products. the gross profit margin is about 30%. Moreover, the Chengdu subway mainly delivered by the company in 17 years are all type B cars, and the type B car company is mainly based on assembly, and the delivery of type A cars will begin in 18 years. The proportion of the self-made part of the model A car company will be greatly increased, and the gross profit margin will be improved.
3. Business transformation is still in the initial stage of rigid fees, resulting in a non-return net profit deduction of 2017 of the company's non-return net profit-151 million yuan, which is basically the same as that of the same period last year, mainly due to the rigidity of expenses during the period. Rigid fees cannot be absorbed without a substantial increase in the scale of income The net profit of the parent was 12.46 million yuan, down 33.4% from the same period last year, mainly because the government collected and saved six cases of land and all land attachments located in Xinjin Industrial Park in the fourth quarter, resulting in asset disposal income of 174 million yuan.
In 2017, the company's three fees totaled 445 million yuan, and the expense rate during the period was 26.78 percent, down 1.51 percent from the same period last year. 1) sales expenses were 97.46 million yuan, down 3.75% from the same period last year, mainly; 2) financial expenses were 105 million yuan, an increase of 1.89% over the same period last year, mainly due to the contraction of bank credit for 17 years, and the overall high cost of capital; 3) management expenses were 242 million yuan, an increase of 7.39% over the same period last year. The company continues to strengthen the research and development of a number of businesses, mainly rail products. In 17 years, the R & D investment of 104 million yuan increased by 74% compared with the same period last year, and the proportion of R & D investment in operating income also reached 6.28%, an increase of 2.34% over the same period last year. The company announced on March 20 that it signed a technology transfer agreement with Max Berger International Europe, with an initial license fee of 30 million euros. It is basically apportioned according to 10-15 years (specifically based on accounting standards), and the R & D expenditure will increase by about 20 million in 2018. At present, the company's production capacity layout or corresponding output value of about 10 billion, during the period expenses are rigid expenditure, short-term obvious decline is unlikely, but with the growth of income, the expense rate will decrease significantly.
4. The completion of the layout of the multi-standard rail transit system in the future may effectively boost the company's income in 2017 and gradually realize the transformation of the rail transit business from assembly to self-research. The company won the order for the track system of Chengdu Rong Line 2 in 2017, and completed the trial of the new track system on the Guangzhou subway line. The test has achieved positive results and will play an exemplary role in the promotion of future products. In addition to the normal provision of rail transit vehicles to the Chengdu market, the trial production of the company's independent research and development of 100% trams has been successfully completed, related certification and other work has also achieved phased results, and the independent research and development platform and capability have been initially established. The company's rail transit business has gradually transformed from a low value-added vehicle assembly business to a high-end business integrating technology research and development and vehicle manufacturing.
At present, the company's rail transit business is mainly carried out in the southwest region with Chengdu as the center, and will fully benefit from the development of local urban rail transit. According to Chengdu's official plan released in 2017, 14 new rail transit lines will be added by 2020, and 97.3 kilometers of modern tram lines will be opened by 2020. At the same time, the main business income of rail transit industry manufacturing will strive to exceed 26 billion yuan in 2018, and all rail transit project vehicles in the city will be produced locally, which will bring great opportunities for the new construction shares rooted in Chengdu. At the same time, around the portal hub such as Chengdu Tianfu International Airport, Chengdu will speed up the application research of the new urban rail transit mode represented by medium-and low-speed maglev, and start the construction of medium-and low-speed maglev demonstration line as soon as possible. the company signed a technology transfer agreement with Max Berger International Europe on March 20, which may make an obvious breakthrough in medium and low speed maglev in the future.
The rail transit business has made bold strides to form the ability to provide a variety of urban rail products. In 2017, the company invested 80 million yuan with Panzhihua State Investment to establish Panzhihua Electric Intelligent Air bus Co., Ltd., which entered the field of empty track. At the beginning of 2018, it reached a technology license agreement worth 34.5 million euros (initial license fee 30 million euros + additional license fee 4.5 million euros) with Max Berg Group, which provided the main technology to Shanghai maglev system. Borg is a leader in the German railway infrastructure industry, the main technology transferor of China's high-speed rail infrastructure, one of the world's earliest advocates and practitioners of maglev transportation, and the main technology transferor and supporter of Shanghai maglev transportation system. Future cooperative development includes a light rail transit system with an one-way hourly cross-section capacity of 35000 people per hour, a municipal transport system with a speed of 160km / h and a short-distance intercity transport system with an one-way hourly cross-section capacity of more than 45000 people. The company will form a manufacturing capacity that includes a new generation of medium-and low-speed maglev systems, electric intelligent air bus systems and modern tram systems, as well as the ability to cover the urban rail transit market below 200KM/H.
The domestic market of multi-standard urban rail transit system is about to open, and the company will fully benefit. A few days ago, the National Development and Reform Commission said that in the examination and approval conditions for subways and light rail, the requirements of local fiscal revenue, GDP and other indicators should be tripled (public budget revenue should be more than 30 billion yuan, regional GDP should be more than 300 billion yuan, urban resident population should be more than 3 million in principle, and the scale of long-term passenger flow should reach an one-way peak hour of more than 30,000). And the government debt ratio of new cities in the past three years should not be higher than 120%. As the basic condition for the examination and approval of construction planning and the start of new projects, the improvement of the approval threshold of traditional subway will directly lead to an increase in the demand for multi-standard rail transit. Modern trams and the new generation of medium-and low-speed maglev are excellent options for urban rail transit. More than 10 cities, including Shanghai, Changsha, Beijing, Shenzhen, Chengdu, Wuhan, Yueyang, Zhuzhou, Chenzhou, Fuyang, Qingyuan, Shaoxing, Urumqi, Xuzhou, Zibo and Zhangjiajie, have built, are under construction or are planning to build medium and low speed maglev systems.
5. Strive to build 10 billion revenue enterprises in the field of rail relations, waiting for the performance release of senior executives to show confidence, and strive to achieve the 10 billion revenue target by 2020. The unlocking condition of equity incentive is that the operating income in 17-19 years is not less than 1.6 billion, 2.7 billion, 3.7 billion, and based on the operating income of 1.52 billion in 16 years, the growth rate in 17-19 years is not less than 5.3%, 77.6%, 143.4%. On February 4, 2018, 11 senior executives, including General Manager Yang Yonglin, planned to increase their holdings of the company's shares by not less than 30 million yuan and not more than 180 million yuan. At the same time, the company also set the goal of achieving an annual sales revenue of more than 10 billion yuan by the end of the 13th five-year Plan, fully demonstrating the company's internal confidence in its own development.
It may cause strategic investors to land. On June 16, 2017, the controlling shareholder Xinzhu Investment and its actors Juying Technology and Xinjinxin proposed to transfer no less than 5% and no more than 20% of the company's shares to the selected investors who have synergy with the company's business (giving priority to state-owned enterprises and central enterprises) through agreement transfer. (at present, the proportion of shares held by the newly built investment and its concerted actors in the newly built shares is 27.61%), mainly to introduce strategic investors who can bring about an incremental market. Under the circumstances that the company has completed the product layout, it is expected to land in 18 years and open up the space for market expansion.
In recent years, the company has actively laid out the rail transit business and successfully realized the business transformation, and will fully benefit from the rapid development of multi-standard urban rail construction in the southwest and the whole country in the future. The rail delivery orders on hand are sufficient, and the transformation has been completely landed, but the company's operating cash flow is poor, the turnover rate of accounts receivable is very low, a large number of bank loans and accounts payable are needed, and the rigid fees need to be digested by increased capacity utilization. The pressure of 18Q1-2 is still high, waiting for the company's orders to be confirmed in revenue so as to release performance flexibility. We predict that the company's return net profit from 2018 to 2019 will be 61 million yuan and 174 million yuan respectively. Maintain prudent recommendations.
6. Risk hint: the construction of multi-system rail transit system is not as expected, the operating cash flow is poor, and the high rigid expenses have the risk of income falling short of the expected net profit and loss.