Events:
The company released the first quarter report of 2018. In the first quarter of 2018, the company achieved operating income of 354 million yuan, an increase of 3.79% over the same period last year. The net profit of shareholders belonging to listed companies was 17.5029 million yuan, down 23.68% from the same period last year. The net profit of non-parent companies was 17.477 million yuan, down 18.35% from the same period last year, or 0.0203 yuan per share, down 23.68% from the same period last year.
The company expects to achieve a net profit of 3871.99-55.3142 million yuan for shareholders of listed companies from January to June 2018, a year-on-year change of-30.00% to 0.005%.
Comments:
The gross profit margin of new chemical materials products has declined, and the company's profitability has declined. Company to "chemical new materials + high-end equipment manufacturing" two-wheel drive development. The new chemical materials plate is mainly engaged in the business of polyester resin products for powder coatings, with an annual production capacity of 150,000 tons; the high-end equipment manufacturing plate mainly sells tooling moulds, structural components and Beidou navigation terminal products. In the first quarter of 2018, the company achieved revenue of 354 million yuan, an increase of 3.79% over the same period last year. Affected by the decline in gross margin of new chemical materials products, the company's gross profit margin fell 1.99 percentage points to 15.98% compared with the same period last year. During the period, the expense rate increased by 1.58% year-on-year to 11.25%. The acquisition of Zhongxing Weiye increased the profit and loss of minority shareholders by 3.52 million yuan compared with the same period last year. Finally, the company achieved a net profit of 17.5029 million yuan, down 23.68% from the same period last year.
Raw material prices rebounded, NPG and resin expansion projects will be put into production one after another. The company's main raw materials include neopentyl glycol (NPG) and refined terephthalic acid (PTA) and so on.
NPG mainstream domestic market prices in eastern China are showing signs of rebounding after hitting a low of 1.075 yuan / tonne at the end of February, with the latest price at 1.335 yuan / tonne, but still down 6 per cent from a year earlier. The price of PTA in East China market is high and volatile, with the latest quotation of 5590 million yuan / ton. The company currently has a polyester resin production capacity of 150000 tons, far exceeding its competitors, and ranks first in the market share. The subsidiary Huangshan Shenjian project with an annual output of 50,000 tons of polyester resin is expected to be put into production in June this year, while the 40,000 tons of polyester resin project in Spain and the European R & D center project are expected to be put into production from the end of this year to next year, and product sales are expected to further increase. In terms of raw materials, the NPG project with an annual output of 30,000 tons of Lihuayi Shenjian has been put into production, and the Anshan Shenjian annual production of 40,000 tons of NPG project is expected to be put into production by the end of this year, the supply of raw materials will be effectively guaranteed, and the company's ability to resist the risk of price fluctuations in the industry has been greatly improved.
With the continuous enrichment of the high-end equipment manufacturing plate, Jiaye Airlines has fulfilled its performance commitment. On the basis of developing the traditional advantage polyester resin business, the company has continuously enriched the high-end equipment manufacturing sector in recent years. Jiaye Aviation, which was acquired in 2015, is mainly engaged in high-end equipment manufacturing in the fields of aviation, aerospace and rail transit. It has national military standard quality management system certification certificate, weapons and equipment research and production license and third-level confidentiality qualification. In 2017, Jiaye Airlines realized deduction of non-return net profit of 59.3483 million yuan, fulfilling its performance promise.
This year, some of the mechanical processing processes of Jiaye's aviation rail transit plate will be landed in Yuchang, which is conducive to the rapid expansion and strengthening of Xi'an Jiaye's existing business. Shenjian Yuchang, a wholly-owned subsidiary, has increased the areas of aviation, aerospace and rail transit business.
Acquire 60% of the layout navigation business of China Star Weiye. In May 17, Jiaye Airlines, a wholly-owned subsidiary, acquired a 60% stake in China Star Weiye with 127.8 million yuan. The business of China Star Weiye is dominated by the research and development of satellite positioning systems and modules, and the navigation control system is supporting. The Beidou satellite communication navigation terminals produced are mostly assembled in some weapons and equipment of the Navy, and have military industry certificate 4 and second-level security qualification. This acquisition will help to make up for the shortcomings of Jiaye Airlines in related business. To achieve an orderly and rapid expansion of its business, give full play to synergy, expand and strengthen the "high-end equipment manufacturing" plate. Zhongxing Weiye realized revenue of 29.1529 million yuan and net profit of 13.3767 million yuan in 2017.
Profit forecast and rating: we expect the company's operating income from 2018 to 2020 to reach 2.389 billion yuan, 3.186 billion yuan and 3.808 billion yuan respectively, an increase of 30.70%, 33.36% and 19.53%, and the net profit of 218 million yuan, 342 million yuan and 452 million yuan respectively, an increase of 75.36%, 56.71% and 32.18% respectively. The dynamic PE corresponding to the closing price of 4.57 yuan per share on May 02, 2018 is 18 times, 12 times and 9 times respectively, maintaining the "overweight" rating.
Risk factors: raw material price fluctuations, new production capacity is not up to expectations, high-end equipment manufacturing sector development is not up to expectations.
