3Q2018 realized a net profit of 137 million yuan, an increase of 94.44 percent over the same period last year. The company announced that its revenue in the first three quarters of 2018 was 2.536 billion yuan, an increase of 15.82% over the same period last year; the net profit was 353 million yuan, an increase of 61.96% over the same period last year; the net profit was 292 million yuan, an increase of 37.74% over the same period last year; and EPS0.43 yuan per share was realized. According to this estimate, 3Q2018 achieved revenue of 939 million yuan, an increase of 14.84% over the same period last year, and a net profit of 137 million yuan, an increase of 94.44% over the same period last year.
The gross profit margin of 3Q2018 increased by 2.46% month-on-month, while the ratio of three fees decreased. 3Q2018's comprehensive gross profit margin was 31.15%, a significant increase of 2.46% over 2Q2018 and 1.16% higher than 3Q2017. On the other hand, the company's three fees were properly controlled during the reporting period, in which the 3Q2018 sales expense rate, management expense rate and financial expense rate were 5.83%, 7.05% and-1.53% respectively, up 0.33%, 2.58% and 0.6% respectively from the previous month. The total expense rate during the 3Q2018 period was 11.35%, down 1.64% from the previous month and 6.2% from the same period last year.
Kaiping Baihui, a subsidiary of capital increase, lays the foundation for Weifeng's international business development. In March 2018, the company acquired a 100% stake in New Arts Industry and Yongxie Development for HK $259 million. Through this merger and acquisition, the company has obtained the land use rights held by its subsidiaries, plants and machinery under construction, and further expanded its production capacity. During the reporting period, the company increased its capital by US $3 million to Kaiping Parkway, a wholly-owned subsidiary of Yongxie Development, to further enhance its financial strength and comprehensive competitiveness, and lay the foundation for Weifeng International to open up more new customers and achieve sustained and stable performance growth.
New models and new parts are constantly expanding, and Yingdong's molding performance is growing steadily. Since 2018, overall car sales in China have shown a downward trend, and Yingdong Molding has achieved reverse growth in both revenue and profit. At present, the main customers in the automotive industry are Sino-foreign joint venture car enterprises, and the sales of products are linked to the sales volume of matching models. The company continues to deepen cooperation with existing high-quality customers, carry out horizontal expansion of products, and strive for more spare parts business in one model, as well as expand other models. Under this strategic policy, the company's automobile molding business has maintained steady growth since the beginning of this year, becoming an important driving force for performance growth.
Profit forecast and investment rating. We expect the company's EPS to be 0.46,0.47,0.56 yuan per share respectively from 2018 to 2020. Combined with comparable company valuation, we cautiously give 2018 13-15 times PE, corresponding to a reasonable value range of 5.98-6.9 yuan, which is better than the market rating.
Risk hint. Car sales have fallen, new capacity has been released less than expected, and raw material prices have risen sharply.