Profits have declined markedly. The company's 18-year revenue 3. 8.1 billion yuan, a year-on-year decrease of 17. 33%; the net profit of the mother was 4901. 370,000 yuan, a year-on-year decrease of 35. 26% The decline in net profit was mainly due to a decline in the company's operating income and an increase in financial expenses. The company expects net profit to fall 40%-50% year-on-year in the first quarter of '19, mainly due to the decline in operating income due to cyclical changes in demand for new model projects in North America, and the impact of rising costs after tariffs were imposed on some products.
China's leading integrated manufacturer of precision mold parts series. The company specializes in R&D, production and sales of precision molds and parts such as automobile molds, semiconductor computer molds, household appliance molds, pharmaceutical molds, etc., automation equipment and medical equipment parts. It is a first-class integrated manufacturer of precision mold parts series in China. The company's core products are a series of precision mold parts, represented by automobile mold parts, and its customers are all major domestic vehicle manufacturers.
There is still a huge demand for automotive molds. The demand for automotive stamping dies is not affected by their service life, but rather depends on the speed at which new models and model modifications are introduced. Often, a set of automotive stamping dies are eliminated before reaching their useful life. In recent years, foreign automobile manufacturers have been purchasing automobile molds in China, and the rapid development of new energy vehicles has also stimulated demand for automobile molds. A new model requires redesigning and manufacturing molds worth 100 million yuan, and the revised model requires 25 million yuan of molds. In 2018, China added more than 300 new and remodeled models each, and the market size of the new automobile mold market was close to 40 billion. As a result, despite the overall decline in domestic automobile production in 2018, demand for automotive abrasives is still very strong.
Fundraising projects are gradually being produced, and profitability is expected to increase. The production and sales rate of the company's molds and parts is around 100%, and production capacity bottlenecks seriously limit the company's profitability. Projects that went public and raised in 2016 with a production capacity of 2 million pieces/year for new precision abrasive parts, 800,000 pieces/year for automation equipment component expansion projects, 500,000 pieces/year for pharmaceutical mold parts, and 500,000 pieces/year for medical equipment parts began to gradually reach production in 2018, which will have a positive impact on the company's future performance.
Profit forecast: The company's revenue is expected to increase by -17 in 2018-2020. 33%, 5%, and 8%, EPS is 0. 37 yuan, 0. 40 yuan and 0. 43 yuan, giving the company an “increase in holdings” rating.
Risk warning: 1) the price of raw materials is rising; 2) demand for automobile molds falls short of expectations; 3) the expansion progress of fund-raising projects falls short of expectations.