Main points of investment
In the first half of 2018, the company achieved operating income of 1.791 billion yuan, an increase of 19.82% over the same period last year. The income of the parent company was 359 million yuan, down 3.54% from the same period last year, while the income of the subsidiary company was 1.432 billion yuan, an increase of 27.57% over the same period last year. Among them, the income of subsidiary Hangzhou Saishi Garden and Shandong Meichen Industrial Group Co., Ltd. increased by 18.08% and 26.90% respectively over the same period last year. The income of rubber hose products, rubber damping products, real estate gardens and municipal gardens reached 244 million yuan, 411 million yuan, 307 million yuan and 682 million yuan respectively, an increase of 8.78%, 22.38%, 15.50% and 24.21% respectively over the same period last year.
In the first half of 2018, the company achieved a comprehensive gross profit margin of 32.74%, down 1.40% from the same period last year, and a net profit rate of 17.49%, an increase of 1.64% over the same period last year. In the case of a decline in gross profit margin and an increase in fees during the period, the increase in the company's net profit margin is mainly due to the substantial increase in net investment income and asset disposal income. The gross profit margins of rubber hose products, rubber damping products, real estate gardens and municipal gardens were 32.12%, 31.29%, 28.73% and 35.42% respectively, with year-on-year changes of-5.94%,-4.67%,-8.44% and 4.35%, respectively. the gross profit margins of all businesses except municipal gardens have decreased.
The company's expenses accounted for 17.50% in the first half of 2018, up 2.46% from the same period last year. Itemized, the sales rate, management rate and financial rate of the company in the first half of 2018 increased by 0.83%, 0.84% and 0.78% respectively over the same period last year. In the first half of the year, the company generated 39 million of the net investment income, accounting for 2.19% of the income, mainly due to the recognition of interest during the construction period of the PPP project.
The income from the sale of land has greatly increased the net profit of the rubber non-tire business, which is also the main source of the company's non-recurrent profit and loss. The non-recurrent profit and loss of the company in the first half of 2018 was 68 million, accounting for 3.82% of the income, which was mainly due to the income confirmed after the acquisition and storage of land by the auto parts plate during the reporting period.
The company's asset impairment loss accounted for 0.20% in the first half of 2018, up 0.71% from the same period last year; the net operating cash flow per share was-0.09 yuan, up 0.06 yuan per share over the same period last year.
Earnings forecast and rating: we downgraded the company's EPS to 0.52,0.60,0.69 yuan from 2018 to 2020, and the PE corresponding to the closing share price on August 23 was 14.1,12.2,10.6 times, maintaining the company's "prudent overweight" rating.
Risk tips: the arrival of PPP orders is not as expected, the deterioration of project payback results in asset impairment losses, the business gross profit margin continues to decline, and the increase in financing costs increases the financial expenses.
