Event: the company recently issued a forecast of third-quarter results, showing a profit of 121.6493 million yuan to 155.5856 million yuan in the first three quarters, an increase of 10 percent to 30 percent over the same period last year, and a profit of 44.0215 million yuan to 6795.78 yuan in the third quarter, an increase of 3.33 percent and 59.52 percent over the same period last year.
Liquid food filling equipment leader, performance to maintain steady growth: the company is the domestic liquid food filling equipment leader, the main products include liquid food filling and sealing equipment, intelligent packaging equipment and hollow container blowing equipment, downstream applications in the dairy industry, accounting for nearly 90%, customers include Yili, Mengniu, Guangming, Danone and other domestic and foreign dairy enterprises. In recent years, the company's business areas continue to expand horizontally to edible oil, daily chemical, medical and health industries, to the back of the vertical expansion of intelligent packaging, performance to maintain steady growth. In the first three quarters, the company made a profit of 121.6493 million yuan to 155.5856 million yuan, an increase of 10% Mur30% over the same period last year, of which the net profit affected by non-recurrent profit and loss was 2000-23 million. The order situation of the company this year is relatively good. In the first half of the year, the company received 518 million in advance, an increase of 30.81% over the same period last year. We judge that the company's revenue growth rate is expected to return to more than 10% next year.
For the benefit of consumption upgrading, there is still a lot of room for the growth of the equipment market: at present, the per capita consumption level of liquid milk products in China is only about 4 to 5 of that of developed countries, and there is more room for overall growth in the long run. The downstream of the company's products are mainly low-temperature liquid milk, high nutritional quality, in line with the trend of consumption upgrading. According to Euromonitor statistics, the compound growth rate of retail sales of yoghurt products nationwide from 2005 to 2015 was 14.22%, which was higher than that of room temperature liquid milk. With the continuous increase in the total production of liquid milk and the continuous release of the demand for new equipment and renewal, the market capacity is still growing. In terms of exports, at present, the company's export revenue accounts for only about 5%, and the export market is expected to become a new growth point for the company.
Pay attention to high R & D barriers, while extension pays more attention to technical capabilities: the company's R & D expenses and proportion are increasing year by year. In 2016, the company invested 43.42 million in R & D, accounting for 6.82% of revenue and 14.47% of R & D personnel, creating high-tech barriers to the company's products. 2017H1 gross profit margin is 44.60%. Due to the low gross margin of some orders, the gross margin decreased by 2.51% compared with the same period last year, and the overall gross margin remained high. In addition, the extension of the company pays more attention to the technical capability of the company, by investing 24.4 million yuan to hold 30% equity of Ningbo Zhongwu Optoelectronic Sterilization Technology Co., Ltd., and 6 million yuan to hold 2% equity of Hangzhou Huijie Intelligent Technology Co., Ltd. invest 1 million shares in flexo electronics, thus enhancing cold sterilization technology, visual technology and electronic tags and other technologies for the company to cultivate new profit growth points.
Profit forecast and investment advice: the company's EPS from 2017 to 2019 is expected to be 0.66,0.78 and 0.89 yuan respectively, corresponding to 31 times, 26 times and 23 times of PE, respectively.
Risk hint: the demand growth rate of the downstream dairy industry slows down, and the intensification of competition leads to gross profit margin.
