Items:
In 2018, the company achieved operating income of 1.357 billion yuan, an increase of 9.75% over the same period last year; net profit belonging to shareholders of listed companies was-577 million yuan, up-882.12% over the same period last year; and net cash flow from operating activities was 1.426 billion yuan, an increase of 8.52% over the same period last year.
Comments:
Operating income increased slightly and the impairment of goodwill affected the profits of the current period. During the reporting period, the company's three main products, vehicle electrical equipment / ground special power supply / informatization and safety testing, respectively achieved business income of 618 million / 383 million / 347 million, an increase of 0.48%, 5.36% and 62.86% respectively over the same period last year. The comprehensive gross profit margin during the reporting period was 31.45%, 3.34 percentage points lower than that of the same period last year. The return net profit is-577 million yuan, mainly due to the provision of 606 million yuan for goodwill impairment formed by the acquisition of Wuhu Dinghan (former Haixing cable) during the reporting period. after deducting this effect, the company's net profit belonging to the shareholders of the listed company is 29.7836 million yuan.
Research and development costs have increased, the completion of a number of innovative products. During the reporting period, the company's R & D expenditure was 506 million, an increase of 5.98% over the same period last year. During the reporting period, the company released natural refrigerant (carbon dioxide CO2 refrigerant) air conditioning, DC1500V direct power supply air conditioning, rail vehicle intelligent air conditioning system and other new products, representing the rail transit air conditioning for green, energy-saving, intelligent development of technology forward-looking. At present, the natural refrigerant (carbon dioxide CO2 refrigerant) air conditioner has been invited by Deutsche Bahn to carry out trial loading, which opens a window for the key services of this product and the expansion of overseas markets, and provides a guarantee for the company's future performance growth.
Guangzhou Rail Transit Fund to buy shares to increase brand competitiveness. Guangzhou Rail Transit Fund is a private equity fund led by Guangzhou Metro Group Co., Ltd. And Guangzhou Industrial Investment Fund Management Co., Ltd., which aims at investment in the field of rail transit industry. During the reporting period, the shareholders of the company have completed the stock delivery procedures, and the Guangzhou Rail Transit Fund holds 50956436 shares of the company, accounting for 9.12% of the total share capital of the company. The company will continue to carry out strategic cooperation with Guangzhou Rail Transit Fund to realize the company's technological innovation, market promotion and industrialization development through resource sharing.
Profit forecast, valuation and investment rating. Based on the increase of the company's new orders, the competitive advantages brought about by future product upgrades and diversification, as well as the management improvements brought about by internal control, we adjust the company's EPS from 2019 to 2021 to 0.16 yuan 0.32 pounds 0.48 yuan (originally predicted to be 2019 yuan 0.69 yuan), corresponding to the PE of 48-25-17, considering that the company is at the inflection point of profit recovery, we value Dinghan Technology at 25 times in 2020, and the target price is 8 yuan. It is basically in line with the current price, downgraded to "neutral".
Risk hint: the landing of the new product is not as expected and the tender is delayed.