In the first three quarters, revenue increased by 23%, and net profit increased by 33%. The company's revenue in the first three quarters was 2.08 billion yuan, an increase of 23% over the same period last year, and its net profit was 88.24 million yuan, an increase of 33%, a gross profit margin of 17.95%, a decrease of 1.83pct, a decrease of 4.97% of sales expenses, a decrease of 1.18pct, and a decrease of 1.52pct of 5.96%. In the third quarter, the revenue was 790 million yuan, up 34% from the same period last year, and the net profit was 27.44 million yuan, up 6.8% from the same period last year, with a gross profit margin of 16.45%, a decrease in 2.76pct, a decrease in sales expense rate of 4.17%, a decrease in 1.43pct rate of 5.22%, and a decrease in 2.08pct over the same period last year.
High sales growth of silk products leads to overall income growth, while low gross margin raw material sales affect overall gross profit margin. The company arranges the raw material base in Guangxi to purchase and sell silk reeling, so as to better grasp the price of raw materials. In the course of developing the business of the base in Guangxi, the scale of the company's silk product business increased significantly, and the revenue growth rate of the first half of the year continued in the third quarter, thus driving the overall income to maintain high growth. However, the gross margin of silk products is low (17H1 is 2.13%), which makes the overall gross profit margin decline. because the silk product sales business chain is simple, the company allocates less resources, it can still contribute profits to the company in the case of low gross profit, and is conducive to timely monitoring the price of raw materials. The financial expenses in the first three quarters reached 21.28 million yuan, mainly due to exchange losses caused by the appreciation of the RMB.
The fixed increase project has been approved. In September, the company's increased project has been approved by the CSRC, and it is proposed to raise no more than 396 million yuan, of which 150 million yuan will be used for the construction of a warehousing and logistics base. specific projects include: 1) 10000 square meters of standard silk warehouse; 2) 25000 square meters of standard cocoon warehouse; 3) 20000 square meters of silk processing and trading market; 4) 5000 square meters of auxiliary office building and loading and unloading yard 5) establish a 18000 square meter distribution transfer warehouse in Jiaxing.
Profit forecast and valuation. The company's main business has a strong brand advantage and industrial chain integration advantage. We are optimistic that the company will achieve cost control and efficiency improvement through intelligent upgrading on the basis of the steady development of the main business. At the same time, the Golden Silkworm Network is optimistic about the industrial integration and performance increment brought about by a series of value-added services with the help of the establishment of Guangxi storage base. From 2017 to 2019, the company is expected to achieve a net profit of 1.12,1.20 and 130 million yuan belonging to the parent company, and give the company 38XPE in 2018, corresponding to the target price of 8.72 yuan per share.
Risk hint. The price of raw materials fluctuates sharply and the export environment is depressed.