Performance review
Performance increased by 106.3%, exceeding expectations
Easy special announced 1H17 results: operating income of 3.45 billion yuan, an increase of 50.7% over the same period last year; net profit belonging to the parent company was 317 million yuan, an increase of 106.3% over the same period last year, corresponding to profit per share. The higher-than-expected growth was mainly due to the rapid growth in data center product delivery.
The year-on-year increase in gross profit margin (2.6ppt) was mainly due to the price difference between the purchase and sales of photovoltaic supporting products due to the time lag, and the gross profit margin remained stable compared with the whole year of 2016. The rate of administrative expenses decreased by 1.1ppt, as the company strengthened its cost control.
Trend of development
The delivery of data center projects has accelerated and the performance of the power sector has grown rapidly. Revenue from the 1H17 high-end power sector increased significantly by 88.1% to 970 million yuan, mainly due to accelerated project delivery of data center solutions. As a result of the increase in the share of solutions, the increase in outsourced supporting products caused the sector's gross profit margin to fall by 7.9ppt to 25.5%. The company actively explores the use of BT, and the construction of self-operation of a variety of cooperation models, and invested in Guo Fu Guangqi to expand IDC and cloud computing business, but there is some uncertainty in the development of new business.
Photovoltaic plate to boost growth, 2H17 growth or slow. The company has nearly 500MW photovoltaic power stations connected to the grid, 1H17 power generation revenue of 143 million yuan, contribution performance increment. With the trend of photovoltaic installation in the first half of the year, the revenue of photovoltaic system integration business increased by 32.4% to 100 million yuan. However, due to the electricity price adjustment in the middle of the year, the demand for photovoltaic products in 2H17 is likely to decline at a rate similar to that in the same period in 2016.
Charging equipment section 2H17 is expected to speed up. Affected by the flat production and sales of new energy vehicles, the income of charging equipment is only 9.26 million yuan. With the resumption of production and sales of new energy vehicles in the second half of the year, plate income is expected to achieve high growth. The company has built charging stations in Dongguan, Guangzhou and other cities, and will expand the intelligent three-dimensional parking market to achieve sustained growth.
Profit forecast
We maintain our earnings per share forecast of RMB 0.23 per share for 18 years in 2017 unchanged.
Valuation and suggestion
At present, the company's share price corresponds to 2017 Compact, which is still higher than the historical valuation center. Taking into account the uncertainty of the acquisition and the reduced risk appetite investigated by the CSRC, we lowered the target price by 19% to 9 yuan, corresponding to the 2017 39x Pamp E, which remains neutral.
Risk.
Power restriction and electricity price subsidy in photovoltaic industry are reduced; administrative penalty of CSRC.
