Driven by environmental protection and overseas business, the net profit of homecoming increased by 42.10% in the first half of 2019 compared with the same period last year.
In the first half of 2019, the operating income was 411 million yuan, an increase of 2.06% over the same period last year; the net profit from home was 62 million yuan, an increase of 42.10% over the same period last year. The main reason why the growth rate of net profit was faster than that of income was due to the increase in the proportion of overseas + environmental protection business, which led to the increase of the company's comprehensive gross profit margin to 33%, as well as the increase in interest income and government subsidies.
The demand for environmental protection such as rural infrastructure and garbage sorting is growing, and the company has a significant competitive advantage.
The company specializes in building materials, logistics, packaging and other fields, and has a significant competitive advantage in the field of mainframes. In recent years, thanks to the rapid release of demand in mainframe areas such as rural toilet renovation and garbage sorting, such orders are expected to grow rapidly in the next few years: 1. Garbage sorting was promoted in 46,337 cities from 2020 to 2025. The demand for garbage sorting bins and transfer bins increased rapidly. In view of the new market demand for garbage classification, the company specially launched DH1450\ DH2050 special injection molding machine for garbage bins to seize the market. In terms of rural infrastructure, the Ministry of Rural Agriculture will launch 7 billion yuan to support the rural toilet revolution in 2019. 10 million households will be renovated in the first half of the year alone, and 12 million households are expected to be completed in the whole year.
Increase technological research and development and expand emerging industries and overseas markets
In addition to the absolute dominance in the existing mainframe field, the company also continues to increase technical research and development in models such as more than 800 tons of large hydraulic direct lock two-plate injection molding machines and less than 600 tons of direct-drive all-electric series, and in-depth layout in a number of new product lines to create large-scale, intelligent, precision, energy-saving all kinds of injection molding machine new products.
Maintain the "buy" rating and suggest paying attention to the release of demand such as garbage sorting and toilet revolution.
It is estimated that from 2019 to 2021, the company's revenue will be RMB 897 / 1416 million respectively, the net profit of 141G will be RMB 234 million, and the current price will correspond to 19-year 24XPE and 19-year 0.74XPEG. In terms of reasonable valuation, combined with the development of the industry and the company, we use PEG valuation to give the company a reasonable valuation of 1.00 times PEG in 2019, with an average annual compound growth rate of 32% in the next three years, corresponding to a reasonable value of 16.96 yuan per share. It is suggested that we should pay attention to the demand release in areas such as garbage sorting and rural toilet revolution, and maintain the company's "buy" rating.
Risk hint: industry demand risk; downstream industry demand lower than expected risk; export business risk.