Items:
The company disclosed its annual report on the evening of the 17th, with revenue of 2.266 billion yuan in 2017, an increase of 19.44 percent over the same period last year, net profit of 256 million yuan, up 3.65 percent over the same period last year, and earnings per share of 0.97 yuan, with net assets per share of 8.07 yuan. It is proposed to pay a cash dividend of 12.50 yuan (including tax) for every 10 shares.
Peace viewpoint:
The growth rate of revenue has reached a new high in recent years, and the increase in the price of raw materials restricts the growth of net profit: in 2017, the company achieved 2.266 billion yuan in revenue, an increase of 19.44% over the same period last year, the highest growth rate in 15 years, and the revenue scale also exceeded the 2 billion yuan mark. mainly because the company is stable according to business while actively developing household business.
However, the company's net profit increased by 3.65% compared with the same period last year, and the growth rate of net profit was slower than that of revenue, mainly due to the impact of rising prices of upstream raw materials. According to the gross profit margin, the 17-year gross profit margin of the company is 33.72%, which is 3.29pct lower than the same period last year; the gross sales margin is down 3.82pct from the same period last year, and the sales expense rate is up 0.53pct from the same period last year, of which advertising expenses are 58.66 million yuan, an increase of about 99% over the same period last year, actively expanding the home market; according to the net profit rate, the company's 17-year net profit margin is 11.28%, which is down 1.72pct from the same period last year. We expect the company's revenue to continue to grow, and the expense rate may be affected by the expansion of home channels.
High growth in household lighting business, actively promoting channel construction: in the past 17 years, the company has vigorously developed household lighting business and set up an independent household products business department. The sales revenue of household business is about 294 million yuan, an increase of 48.82% over the same period last year. The initial high-speed growth of new business. The company strengthens the brand construction by designing the new VI brand logo, signing Li Chen as the brand image spokesman, building a regional exhibition center and so on. In terms of channels, the company has built more than 500 new professional terminals and home terminals in 17 years, and by the end of 17, the total number of stores or areas for household products has been close to 1800. At the same time, the company actively promotes the home lighting project and launches three series of lighting products: Chinese impression, minimalist life and Shanghai classic, which effectively complements and enriches the company's household product line and product structure. We expect the company to further increase channel construction, sales terminal coverage and density will continue to increase, the company's home lighting business is expected to continue high growth.
The company's controlling shareholders and controllers Zhang Yutao, Zhang Xianqing, Lin Yan and Chen Songhui increased their holdings of more than 1.65 million shares of the company through collective bidding in February 2018, with a total increase of more than 3570 million yuan. the average price of the increase is about 21.62 yuan. The company plans to pay a cash dividend of 12.50 yuan (including tax) for every 10 shares, corresponding to the current price dividend rate of about 5.48%. The increase of holdings by real controllers and the high proportion of dividends show their confidence in development and the importance they attach to investors.
Investment strategy: Sanxiong Aurora Mobile Limited, as the leader of domestic commercial lighting, actively develops the home lighting market, which is expected to achieve two-wheel drive and promote sustained growth of performance. We maintain our previous forecast that the company's revenue from 2018 to 2020 will be RMB 2.941 / 5.181 billion, respectively, and its net profit will be RMB 311x409, corresponding to the current PE of RMB 526 million in 21-16-12, maintaining the "recommended" rating.
Risk Tips:
1) the demand is lower than expected. LED lighting is affected by macroeconomic and real estate sales, the downturn of the real estate market will affect the demand for home decoration lighting, macro-economy will affect the social and commercial situation, and then affect the renewal speed of commercial lighting. The company to develop home lighting business may have low market recognition, rising sales costs and other risks.
2) the cost of raw materials is rising. The company mainly purchases LED chips and hardware for assembly and design, the industry cost transfer has a certain time lag, the rising cost of raw materials will affect the company's profitability.
3) the competition in the industry is intensified. LED general lighting is a fully competitive industry, the barrier to entry is relatively low, the industry competition is fierce, lighting products face risks such as price decline.