Steady growth of the main business and maintenance of "overweight" rating
In 2017, the company achieved a total operating income of 686 million yuan, an increase of 7.82% over the same period last year, and a net profit of 186 million yuan, an increase of 15.36% over the same period last year. 2018Q1 expects to make a profit of 38.5376 million yuan to 44.043 million yuan, an increase of 5% over the same period last year. From 2018 to 2020, we expect the company to achieve operating income of 821 million yuan, 1.052 billion yuan and 1.242 billion yuan respectively, and net profit of 221 million yuan, 299 million yuan and 374 million yuan respectively.
Steady growth of main business and smooth expansion of diversified customers
The company's intelligent packaging machinery business grew steadily in 2017. The revenue of the dairy industry increased by 7.09% compared with the same period last year, while that of daily chemical and food industries increased by 14.31%. In 2017, the company's comprehensive gross profit margin was 46.98%, which was lower than the same period last year, which was due to certain concessions made by the company when expanding new customers in daily chemical and food industries. In 2017, the company's gross profit margin in dairy industry was 47.26%, which was higher than the comprehensive gross profit margin. The company's diversified customer expansion has achieved initial results. At present, customers outside the dairy industry have been expanded, including COFCO Group and Yihai Kerry in the edible oil industry, Unilever and Perea in the daily chemical industry, Yabao Pharmaceutical in the medical and health industry, Tianjin Bokelin Pharmaceutical Packaging Technology Co., Ltd. (Tianshili subsidiary), Haizheng Pharmaceutical, Hengrui Pharmaceutical, Tangchen Baijian, Jiangzhong Diet Therapy in the Food Industry, Wufangzhai and so on.
The increase in production and sales rate highlights the capacity bottleneck, and the first phase of the fund-raising project is expected to be put into production in the middle of the year.
In 2017, the production and sales rate of the company's intelligent packaging equipment increased to 96% from 68% in 2016, and the production and sales rate of plastic packaging products remained 99%. The increase in the production and sales rate of the company's intelligent packaging equipment highlights the company's capacity bottleneck, and the fund-raising project is carried out smoothly. The first phase of the project has been completed and is expected to be put into production in June 2018, and the second phase of the project is expected to be completed in 2019. The progress of the fund-raising project is in line with our expectations, and we are optimistic that the company will release its production capacity in 2018 and achieve an increase in growth.
Acquisition of Magex SRL cuts into unmanned retail
The company announced on April 23, 2018 that it intends to acquire a stake in Magex SRL100%, an Italian manufacturer of unmanned retail equipment, for 8.286 million euros in cash. Magex SRL has ten series of unmanned retail equipment products, which can be used in unmanned retail of snack food, beverages, dairy products, ice cream, frozen food, medical supplies, industrial supplies, cultural goods and fashion products. In 2017, Magex SRL achieved revenue of 2.618 million euros and a net profit of 385000 euros. The company has been deeply engaged in the field of high cleanliness aseptic filling equipment for many years, and the cleanliness requirements of food unmanned retail machinery are high. It is expected that the company's acquisition of MagexSRL will produce good synergy and bring new growth points for the company.
The overall performance is in line with expectations and maintains the "overweight" rating.
The net profit of returning home in 2017 is 186 million yuan, which is basically in line with our previous forecast of 185 million yuan. It is estimated that from 2018 to 2020, the company will achieve operating income of 821 million yuan, 1.052 billion yuan and 1.242 billion yuan respectively, and net profit of 221 million yuan, 299 million yuan and 374 million yuan. The average PE of the comparable company in 2018 is 25 times, among which the beer packaging machinery leader Lehui International is more comparable with the company (27 times PE in 2018). Considering the rapid compound growth rate of the company's net profit from 2017 to 2019, it gives the company 27-32 times PE in 2018, with a target price of 22.14-26.24 yuan, maintaining the "overweight" rating.
Risk tips: the construction progress of fund-raising projects is not up to expectation, the intensification of competition in the industry leads to a decline in product prices, the expansion of new customers is not up to expectations, and the situation of acquisition integration is not as expected.
