occurrences
Sifang Technology released its report for the third quarter of 2018. From January to September 2018, it achieved operating income of 859 million yuan, an increase of 24.07% over the previous year; achieved net profit attributable to the parent company of 143 million yuan, an increase of 22.75% over the previous year; and achieved a gross profit margin of 27.98%, a decrease of 5.08 percentage points over the previous year.
reviews
A new tank container production line was put into operation in the third quarter. Production and sales were booming, driving rapid revenue growth in the third quarter, but due to cost pressure, gross margin levels continued to decline
The company achieved operating income of 859 million yuan in the first three quarters of 2018, an increase of 24 over the previous year. 07%; achieved gross profit of 143 million yuan, an increase of 22.75% over the previous year. The company achieved operating income of 332 million yuan in the third quarter of 2018, an increase of 31.58% over the previous year, an increase of 7.35 percentage points compared with the year-on-year growth rate in the second quarter; achieved gross profit of 886.961 million yuan, an increase of 1.57% over the previous year, a decrease of 4.59 percentage points compared with the year-on-year growth rate in the second quarter; and achieved a gross profit margin of 26.68%, a decrease of 0.70 percentage points compared to the year-on-year growth rate in the second quarter.
The company's business was not greatly affected by trade conflicts. Benefiting from the devaluation of the RMB, exchange gains and losses are likely to be positive for net profit throughout the year
In the first three quarters of 2018, the company achieved a total profit of 167 million yuan, an increase of 23.52% over the previous year; net profit attributable to shareholders of the parent company was 143 million yuan, an increase of 22.75% over the previous year. In the third quarter of 2018, the company achieved a total profit of 69.2965 million yuan, an increase of 26.90% over the previous year; the net profit attributable to shareholders of the parent company was 61.21 million yuan, an increase of 29.45% over the previous year.
The company's export business accounts for a high proportion. It is mostly settled in US dollars. The first quarter was greatly affected by exchange gains and losses, but when the RMB depreciated in the second quarter, the company's exchange losses were drastically reduced. We expect the company's overall performance throughout the year to be affected by exchange gains and losses to be limited.
Profit forecasting
We expect that in 2018-2020, the company will achieve operating income of 1,282 million, 1,611 and 2,026 million yuan, net profit attributable to the parent company of 209, 256 million and 306 million yuan, and a total share capital of 211 million shares, corresponding to EPS 0.99, 1.22 and 1.45 yuan. On October 22, 2018, the stock price was 1,490 yuan, corresponding to a market value of 3.144 billion yuan. The 2017-2019 PE was 15, 12 and 10 times, and the latest PB was 1.96 times, maintaining the company's buying rating.
Risk warning: Policy implementation falls short of expectations, market expansion for new products is slowing down, and cost compression exceeds expectations.