Event: the company released three quarterly reports, with operating income of 562 million yuan in the first three quarters, an increase of 10.27% over the same period last year, net profit of 70.4164 million yuan, an increase of 11.46% over the same period last year, and basic earnings per share of 0.27 yuan. Of this total, the operating income in the third quarter was 159 million yuan, down 13.59% from the same period last year; the net profit attributed to the parent company was 26.7981 million yuan, up 12.16% from the same period last year.
Comments: the growth rate of revenue and net profit in the first three quarters is in line with expectations. The decline in revenue in the third quarter compared with the same period last year is mainly due to a decline in domestic automobile production compared with the same period last year, resulting in a decline in demand for horizontal screw reciprocating injection molding machines. The increase in net profit in a single quarter is mainly due to the increase in exchange earnings and interest income.
The company has strong profitability in the domestic injection molding machine industry. With the acceleration of the development of new energy vehicles and the acceleration of lightweight vehicles, the demand for injection molding machines is expected to rise steadily, and the company's revenue and net profit will continue to grow. At the same time, the proportion of overseas sales is increasing year by year, which effectively hedges the adverse effects of domestic demand fluctuations and effectively improves the profitability of the company.
Profit forecast: we expect the company's revenue to grow by 10.5%, 12% and 12% respectively from 2018 to 2020, reaching 777 million yuan, 870 million yuan and 975 million yuan, respectively, and the net profit of returning home will increase by 12.8%, 14.7% and 13.2% respectively, reaching 94.2 million yuan, 108 million yuan and 122 million yuan. The EPS is 0.35,0.41 and 0.46 yuan respectively, and the dynamic PE corresponding to the current stock price is 25.66,21.90,19.52 times respectively, maintaining the "overweight" rating.
Risk tips: 1) the sharp decline in domestic automobile production led to lower-than-expected demand for injection molding machines; 2) intensified market competition.