The company released its semi-annual report for 2017: during the reporting period, the company achieved revenue of 177 million yuan, an increase of 584.53% over the same period last year; and realized net profit of 8.8 million yuan, a decrease of 90.25% over the same period last year. EPS was 0.0178 yuan per share, compared with 0.1827 yuan per share in the same period last year. Due to the divestiture of the real estate business, the profit in the first half of the year was low, in line with market expectations.
The real estate business continues to make a profit, supporting the performance in the transitional period. At present, the main source of the company's profit is the Changzhou Tianhai Land Taihu Manor Phase I project. During the reporting period, the sales income was 174 million yuan, accounting for 98.3%, and the operating profit was 48 million yuan. The total sales of the project is expected to be 696 million yuan. During the transition period from real estate to superalloy, as the only real estate project on sale, Taihu Manor project is expected to provide continuous performance support for the company during the transition period.
The aviation project is carried out in an orderly manner and is expected to be mass-produced in 18 years. During the reporting period, the company's superalloy blades and other products have completed the pilot test, with the technical basis for large-scale mass production. The 16-year non-public offering project plans to build a new production line with an annual production capacity of 250 tons of ultra-pure superalloy, 39600 pieces of advanced engine blades and 60 tons of superalloy powder.
More than half of the military industrial qualifications lay the foundation for the volume of aviation projects. Shenzhen Wanze Airlines, a subsidiary company, has obtained the certification certificate of the national military standard quality management system, and has been approved as a third-level military industrial secrecy qualification unit, and is actively promoting weapons and equipment scientific research and production license and qualification list certification of weapons and equipment production units. The speed at which the company has obtained military industrial certification is basically consistent with the progress of production line construction, which is expected to lay the foundation for the volume of aviation projects.
Civilian projects are progressing steadily. Shanghai precision casting, a subsidiary of the company, is mainly engaged in the industrial production of equiaxed crystal blades and equiaxed crystal turbines, mainly used in civil gas turbines, etc., with a planned investment of 750 million yuan and expected to be put into production in 18 years. Design capacity of 200,000 equiaxed blades and 2.4 million equiaxed turbines. Compared with the military aerospace project, the civil superalloy market is more stable. After the completion of the project, the company is expected to enter the middle and high-end civil superalloy market, the product line is more complete, revenue and profit may be more stable.
The R & D strength is in the lead in China, and the technical difficulties have made a breakthrough. The overall technical level of the research and development team of Wanze Central South Research Institute controlled by the company has reached the world's advanced level, and the leading R & D strength will help the company to achieve long-term development advantages in the superalloy industry. During the reporting period, the company broke through the key technical difficulties, completed the development task of a certain type of turbine blade, and successfully used the process system to produce a batch of qualified blades for a cooperative unit.
Profit forecast and investment advice: we forecast that the company's net profit from 2017 to 2019 is 16 million, 103 million and 278 million respectively, and its EPS is 0.03 yuan per share, 0.21 yuan per share and 0.57 yuan per share, respectively. Corresponding to the closing price of 12.05 yuan on August 17, the dynamic PE is 360,58 and 21 times respectively. In view of the steady progress of the company's superalloy project, the military industrial certification has been successfully completed. Maintain the company's "overweight" rating.
Risk hint: the risk of postponement of non-public offerings and the risk that the development of downstream industries does not meet expectations.