The performance inflection point determined that there was a large loss due to the exploration of the automobile post-market in 2016, and the company's performance came out of the low point with the reduction of losses, the steady growth of traditional steel wheel business and the rapid growth of high-end manufacturing. The company's revenue has increased more than tenfold in the past decade. The company announced its 2018 results, KuaiBao, with an operating income of 2.72 billion yuan, a decrease of 9.68% over the previous year, and a net profit of nearly 170 million yuan, an increase of 214.82% over the previous year.
Steel wheel business has developed steadily and has rich technical reserves, and the company has been selected as "the leading enterprise in China auto parts and wheel industry" by China Automobile Industry Association. After more than 20 years of operation, the steel wheel business has become quite mature and has developed steadily as the company's main business. The operating income of steel wheels has increased steadily over the past decade, reaching nearly 700 million yuan in the first half of 2018, accounting for 47.42% of the total operating income.
High-end manufacturing business ushered in development opportunities, EPS environmental protection equipment to promote the green production of the steel industry. In 2017, Jingu's "high-end equipment manufacturing business" had an operating income of 108 million yuan, with a gross profit margin of 33.89%, while in the first half of 2018, the "high-end equipment manufacturing business" revenue reached 149 million yuan, with a gross profit margin of 48.81%.
The automobile aftermarket business was reorganized, and the store business was separated from the supply chain business, and the latter joined hands with BABA and Kangzhong Auto parts to build Tmall station. In August 2018, Superman, the automotive aftermarket business plate of Jingu shares, joined BABA, Tmall Automobile and Kangzhong Auto parts to establish a new Tmall station, with Jingu shares as the second largest shareholder. The original automobile Superman brand has successively invested in Sichuan Jingdian Automobile, Suzhou famous Jun Parkson, Yunnan Kuaiyi repair and other high-quality regional chain brands, the new retail layout of automobile clothing has begun to take shape and has entered a stage of benign and rapid development.
Profit forecast: the company announced that the return profit in 2018 is 170 million yuan, our net profit in 2019 and 2020 is 253 million yuan and 316 million yuan respectively, and the corresponding valuation is 42X and 33.7x respectively. Recommend rating.
Risk hint: the business progress of the automotive aftermarket is not as expected; the high-end manufacturing business is not as expected; and the growth of the downstream vehicle industry is not as expected.