Event: the company released its 2018 semi-annual report, achieving a total operating income of 771 million yuan, an increase of 58.09% over the same period last year; net profit belonging to shareholders of listed companies was 188 million yuan, up 106.15% over the same period last year; and basic earnings per share was 0.13 yuan per share.
Main points of investment:
Aerospace business is growing steadily: the company's wholly-owned subsidiary Aerospace will achieve an operating income of 721 million yuan tomorrow, an increase of 65.48% over the same period last year, mainly due to a large increase in military orders in the plate. In the first half of the year, the company continued to carry out in-depth cooperation with AVIC and AVIC, gradually expanding the military market, the project continued to expand on the original basis, the cooperation content expanded from single-piece production to large-section delivery, and the market share gradually increased; cooperate with the first Aerospace Institute, the third Academy, the Seventh Academy and other institutes to actively participate in the research and development of new projects and undertake production. Participate in the preliminary research and development of Comac C929 and Commercial Development CJ-2000, seize the domestic large aircraft market, smoothly pass the audit of international well-known aircraft suppliers, actively negotiate with civil aircraft manufacturers such as Boeing Co, Airbus and Bombardier, and carry out international business cooperation to achieve dual-core development of military and civilian products.
Lay out new business directions and provide future performance growth points: the company actively carries out cooperation with China Shipbuilding heavy Industry and carries out in-depth cooperation with 703, 719 and 725 of China Shipbuilding Industry, of which the first large gas turbine cooperated with 703 has been delivered up to standard and is about to start small batch production. the blades cooperated with 719 have been delivered to Jiangnan Shipyard, and the all-sea deep manned detector carried out by 725 is being developed and trial-produced. At the same time, the company has actively expanded the rail transit market, and has been included in the list of suppliers of key supporting enterprises in the rail transit plate in Sichuan Province and qualified suppliers of Qingdao Sifang shares. actively carry out business negotiations with frequent passengers, Zhuzhou locomotives, Tangshan locomotives and other enterprises, has participated in the production of Chengdu Metro Line 7, 10, 6 car body.
Profit forecast and investment rating: while the agricultural machinery business is stabilizing and the aerospace business is growing substantially, the company continues to expand new business growth points, which is expected to provide new momentum for the company's profits in the future. We predict that the EPS of the company from 2018 to 2020 is 0.41 yuan, 0.55 yuan and 0.71 yuan respectively. The corresponding PE is 18.81,13.81,10.75 times, respectively, giving a "buy" rating.
Risk hint: business development is not as expected and aerospace performance is declining.