This report is read as follows:
The new energy vehicle business is a drag on the company's performance. in the future, with the breakthrough in the passenger car field and the increase in the proportion of all-in-one products, the company's performance is expected to return to stable growth.
Main points of investment:
Lower the target price to 21 yuan to maintain the overweight rating. The decline in subsidies in the new energy vehicle industry affected the company's electronic control business, and its full-year performance was lower than expected. The EPS in 2018-2019 will be lowered to 0.70,0.83 (- 0.90) yuan, and the EPS in 2020 is expected to be 1.04. with reference to the average valuation level of the industry and the development prospects of the company's electronic control business, 30x PE will be given in 2018, lowering the target price to 21 yuan (the original target price is 40.81 yuan) to maintain the overweight rating.
The new energy vehicle business is a drag, and the company's full-year performance is lower than expected. The performance of the electronic control business was low. In 2017, the company achieved revenue of 579 million yuan, down 14.58% from the same period last year. The net profit belonging to shareholders of listed companies was 128 million yuan, down 17.39% from the same period last year, and the full-year performance was lower than expected.
Affected by the adjustment of industry subsidy policy, the company's new energy vehicle business income and gross profit margin have been affected. In 2017, the company's electronic control revenue was 448 million yuan, down 19.21% from the same period last year; gross profit margin reached 38.6%, down 6.28% from the same period last year. At present, electric control is still dominated by passenger cars and logistics vehicles, and downstream customers include Dayun and Jinlong; passenger cars are also approached with a number of domestic car companies, and it is expected to achieve the omni-directional layout of new energy buses, logistics vehicles and passenger vehicles in the future. In addition, we also continue to adjust the product structure, promote the sales of all-in-one products, and further enhance the strength of the company's products.
Industrial automation business has maintained steady growth and will increase investment and market expansion in the future. At present, the company's general automation products account for about 21% of revenue, but its gross profit margin is higher than that of new energy vehicles. According to the plan, the company will increase its investment in R & D and production of industrial control products in the future. Considering that the company's executives have the working background of Huawei and Emerson, this investment in industrial control business will enable the company to better enjoy the dividend of this round of industry recovery.
Risk hint: the development progress of downstream car enterprises is lower than expected, and the intensification of market competition affects the gross profit margin.