Events:
The company released its three-quarter report for 2015, with operating income of 990 million yuan in the first three quarters of 2015, an increase of 20.78 percent over the same period last year, and a net profit of 153 million yuan, an increase of 116.6 percent over the same period last year. Diluted earnings per share is 0.28 yuan.
Main points:
Comprehensive consolidation enables the company's performance to grow rapidly.
Tongzhi Mechatronics, which the company acquired last year, has been comprehensively merged from this year, leading to the rapid growth of the company's performance.
According to the previous performance commitment, Tongzhi's net profit in 2015 is not less than 82.54 million yuan. However, with the rapid growth of Tongzhi's mechanical and electrical business in recent years, we expect its actual net profit to reach 100 million yuan. The rapid development of Tongzhi's mechanical and electrical business will continue to promote the rapid growth of the company's military revenue and profits. At the same time, the company's acquisition of Fujian Junpeng and Jiasheng Power supply will start from the fourth quarter. In 2015-2017, Fujian Junpeng promised to deduct non-net profit of not less than 5500, 7200 and 95 million yuan, and Jiasheng Power supply promised to deduct non-net profit of not less than 2000, 3000 and 40 million yuan.
We expect that the combination of the above two businesses will contribute more than 140 million yuan to the company's profits in 2015.
Adjust the fixed increase plan and increase the military business.
The company adjusts the fixed increase plan, and the investment in the industrialization project of intelligent mechanical and electrical equipment and management system is expected to increase from 190 million yuan to 436 million yuan. This move will enhance the technical level of the company's on-board mechanical and electrical equipment, intelligent power supply, power distribution system and other military intelligent electromechanical management system products, strengthen the company's research and development of new products in these fields, and consolidate the company's leading position in the field of military intelligent electromechanical management system.
At the same time, this move also shows the company's determination to continue to develop its military business in the future, and the company's strategic transformation will remain firm.
The strategic direction of the key components of new energy vehicles remains unchanged.
In the company's latest adjustment and increase plan, the "new energy vehicle charging station construction and operation project based on Internet +" was cancelled. As the environmental assessment cycle of the charging station construction and operation project is relatively long, we judge that the company adjusts the fixed increase project mainly to shorten the audit cycle of the fixed increase project. The strategic direction of the company's increased investment in the field of new energy vehicles has not changed, and there are still opportunities to implement new energy vehicle charging stations in a variety of ways in the future.
Profit forecast and valuation
The company remains determined to transform to the military products and new energy vehicle industry, and can fully enjoy the benefits of the rapid growth of these two industries. We judge that in the future, the company's revenue from military products and key components of new energy vehicles can maintain rapid growth, as well as a higher gross profit level. We expect the company's annual income from 2015 to 2017 to be 14.88,20.24 and 2.692 billion yuan, an increase of 27%, 36% and 33%, the net profit of 2.57,3.89 and 502 million yuan, and 0.45,0.68,0.88 yuan for EPS. Considering that it is still possible for the company to continue to make epitaxial acquisitions, we cover and give a "buy" rating for the first time.
Risk hint
Lower-than-expected epitaxial acquisitions and lower-than-expected orders for military or new energy vehicle products will increase uncertainty.
