Event: the company released its annual report that its revenue in 2017 was 20.804 billion yuan, an increase of 1128.48% over the same period last year, and its net profit was 1.137 billion yuan, an increase of 1209.32% over the same period last year. The substantial increase in performance is mainly due to the reverse purchase of Zhongtai.
Production and marketing performed well throughout the year. Against the background of weak overall sales of passenger cars for the whole of 2017, the sales of various models of the company are still good, with 196,000 SUVs produced and 183000 sold during the reporting period: 16000 basic passenger cars were produced and 13000 sold, 34000 pure electric passenger cars were produced and 32000 were sold; a total of 246000 cars were produced and 228000 vehicles were sold, which is in good condition.
Stable cash flow and healthy financial position. The net cash flow generated by the company's operating activities during the reporting period was 9.0254 million yuan, and the company's net return profit for this year was 1.117 billion yuan. The main reasons for the big difference between the net operating cash flow and the current year's net profit are: (1) the company mainly uses bills to settle accounts this year, resulting in an increase of about 1.884 billion yuan in bills payable. (2) the amount of accounts receivable increased by about 3.724 billion yuan due to factors such as the unrecovered state subsidy at the end of the period and the outstanding payment at the end of the period; (3) the amount of depreciation and amortization is relatively large this year. The operating income from the first to the fourth quarter was 535 million yuan, 5.251 billion yuan, 5.809 billion yuan and 9.209 billion yuan respectively. Among them, the sharp increase in operating income in the second quarter is mainly related to the acquisition of Yongkang Zhongtai.
Join hands with Ford to set up a joint venture, which is expected to make another breakthrough in the field of new energy vehicles. On November 8, 2017, Zhongtai Motor and Ford Motor reached an agreement to make use of the advantages of both sides in vehicle manufacturing and enterprise management to establish a competitive and sustainable development capability. a pure electric passenger vehicle manufacturer integrating R & D, procurement, manufacturing, sales and service, which is expected to be put into production in September 2019. In the future, Zhongtaifu is expected to contribute strong growth momentum.
Investment rating: the company's net profit from 2018 to 2020 is estimated to be 11.9,13.6 and 1.53 billion yuan respectively, EPS 0.59 and PE 0.67, respectively, 11.8 times as much as 15.0, 13.2 and 11.8 times, respectively.
Risk tips: risks related to subsidies for new energy vehicles; potential cost pressure; export decline