Net profit in the first half increased by 12.63%, maintaining the "overweight" rating.
In the first half of the year, the company achieved an income of 315 million yuan, a decrease of 5.01% over the same period last year, and a net profit of 98.6935 million yuan, an increase of 12.63% over the same period last year. The net profit after deducting non-profit was 74.213 million yuan, a decrease of 0.69% over the same period last year, which is in line with our expectations. The first phase of the company's production capacity has been successfully landed and the layout of unmanned retail. Based on the optimistic prospects of the company, we maintain our profit forecast unchanged. It is estimated that the EPS for 2018-2020 will be 0.82 yuan 1.11 yuan, the target price is 16.40-18.05 yuan, and the "overweight" rating will be maintained.
The production capacity of the fund-raising project is released, and the customer cultivation is progressing smoothly.
In the first half of the year, the first phase of the company's fund-raising project was completed and gradually put into use. The company's fund-raising projects include an annual production capacity of 204 sets of new intelligent packaging machinery and 13 sets of automatic aseptic plastic bottle filling and capping units. The construction area of the first phase of the project is 60020.76 square meters, which brings about 50% of the total production capacity, which can effectively alleviate the problem of insufficient production capacity of the company. Based on the dairy industry, the company expands its sales scope to medical and health, edible oil, daily chemical, food and other industries, serving well-known customers such as Unilever, Peraia, Hengrui Pharmaceutical, Haizheng Pharmaceutical, Tangchen Beijian, Jiangzhong Dietotherapy, Wufangzhai and so on.
Gross profit margin increases slightly, financial income contributes to profit
In the first half of the year, the gross profit margin of the company's intelligent packaging equipment rose 4.65 percentage points to 51.48%, while the gross profit margin of plastic packaging products fell 10.44 percentage points to 14.88%. The gross profit margin of accessories remains basically stable. Smart packaging equipment accounted for 87.75% of revenue, so the comprehensive gross profit margin improved slightly year-on-year, rising to 47.54%. In the first half of the year, the company used idle funds to purchase wealth management products to achieve an investment income of 19.0875 million yuan, which played a positive role in the overall performance of the company. The slow weekly change of accounts receivable in the first half of the year brought cash flow pressure, and the turnover days of accounts receivable changed from 53 days to 68 days in the same period last year, dragging down the company's net operating cash flow from 61.95 million yuan in the same period last year to-9.96 million yuan.
Layout of cold chain unmanned retail to cultivate new growth points
In the first half of the year, the company paid 8.286 million euros in cash to acquire a 100% stake in MagexSRL, an Italian manufacturer of unmanned retail equipment. Magex SRL has ten series of unmanned retail equipment products that can be used in sales scenarios of snack food, dairy products, beverages, ice cream and other products. There is a high degree of cooperation between food unmanned retail equipment and the company's high clean food equipment technology. In July, the company invested 3.5 million yuan and 70% of the shares to set up Magis (Hangzhou) Refrigeration Technology Co., Ltd., operating food-grade refrigerated display cabinets. In the future, cold chain unmanned retail equipment is expected to become a new growth point of the company.
Smooth release of production capacity and maintain "overweight" rating
The smooth release of the company's production capacity is the basis for the acceleration of the company's performance growth, and the cold chain unmanned retail is expected to become a new growth point. We keep our profit forecast unchanged, and we estimate that the EPS from 2018 to 2020 will be 0.82 yuan 1.11 yuan 1.38 yuan respectively. In 2018, the company's PE was 18 times, and the industry's average PE was 20 times that of the company in 2018. Taking into account the downward valuation center of the industry, we lowered the 2018 valuation target to 20-22 times PE, corresponding to the target price of 16.40-18.05 yuan, maintaining the "overweight" rating.
Risk hint: the capacity utilization rate of fund-raising projects is not up to expectations, 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 up to expectations.
