Event: on October 30, 2019, the company released its three-quarter report for 2019. The company's income in the first three quarters was 15.538 billion yuan, an increase of 5.07% over the same period last year. The net profit returned to the mother was 243 million yuan, up 24.78% over the same period last year. The net profit after deducting non-return was 184 million yuan, an increase of 49.55% over the same period last year. Of this total, Q3's single-quarter income was 5.352 billion yuan, up 13.44% from the same period last year, and the net profit was 21 million yuan, down 36.58% from the same period last year. The net profit after deducting non-return was 146 million yuan, an increase of 9967.78% over the same period last year.
Net profit and gross profit margin reached an all-time high in a single quarter: 2019Q1-Q3 achieved revenue of 47.77 million yuan, up 1.86%, 0.52%, 13.44% and 13.44% in the third quarter of 2019, the highest growth rate since 2014. The company's 2019Q1-Q3 realized deduction of non-return net profit-1.74 million yuan, an increase of-285.21%, 250.82%, 9967.78%, with a record growth rate in the third quarter. The overall net profit of deducting non-return in the first three quarters was 184 million yuan, an increase of 49.55% over the same period last year. In terms of gross profit margin, 2019Q1-Q3 's gross profit margin was 13.27%, 17.20%, 19.80%, respectively, with a steady increase in gross profit margin, which reached an all-time high in the third quarter.
Enhance the ability to control fees and continue to promote research and development: in the first three quarters of 2019, the expense rate during the company period was 15.74%, a decrease of 0.94pct compared with the same period last year, in which sales expenses / management expenses (excluding R & D) / financial expenses were 83 million yuan / 756 million yuan / 1.185 billion yuan respectively, and the expense rates were 0.54%, 4.86% and 7.62%, respectively, with year-on-year changes in 0.03pct/-0.93pct/-0.04pct. The R & D cost reached 422 million yuan, an increase of 5.25% over the same period last year. In 2019, the company made many R & D achievements, such as the acceptance of the unmanned truck research and development project, the verification of the new IGV model and the multi-sensor fusion positioning and navigation system in the port environment, etc., and entered the intelligent industry.
The trend of automatic terminal construction boosts the demand for port machinery and strengthens the main business of port machinery: Port machinery is the company's traditional main business, and the company has maintained the first market share of container cranes in the world since 1998. In recent years, the trend of automatic wharf construction opens up a new market for port machinery. In the first three quarters of 2019, the container cargo throughput of China's major ports totaled 195.18 million TEUs, an increase of 4.95 per cent over the same period last year. The growth of container ship loading capacity has increased the requirements for port loading efficiency, which has given rise to the demand for the construction of automated terminals and opened up new performance growth points for the company's port machinery business. On September 25, 2019, the company announced the signing of the contract "Guangzhou Port Nansha Port area Phase IV Container Terminal automatic loading and unloading system Purchasing Project (Phase I)", which will build Guangdong-Hong Kong-Macau Greater Bay Area's first fully automated terminal with a contract amount of about 1.638 billion yuan. accounting for 10.93% of the company's port machinery revenue in 2018. With the help of the trend of automatic terminal construction, the company's main port machinery business continues to be consolidated.
After the development of port machinery market, business diversification: affected by the trend of large-scale ships, the heightening and remote upgrading of the traditional wharf has opened up the growth space for port machinery maintenance, transformation and other service business. In 2019, the company has made solid progress in the maintenance and transformation of port machinery, and has completed the delivery of many key projects, such as Maersk Moroccan automatic quayside crane, Italy VTE tire crane, Maersk Ghana quayside bridge and tire crane, COSCO Abu Dhabi quayside bridge and automatic track crane, and formally signed a 4-year maintenance contract with UAE National Oil Company. The company continues to make efforts in the port machinery market to further expand the volume of port machinery business.
Investment suggestion: in view of the trend of automated terminal construction boosting port machinery demand, the continuous progress of major marine and steel structure projects, wind power business building the whole industry chain and other factors, and the company's performance is expected to be further released. According to the model, the net profit of homing from 2019 to 2021 is expected to be 566 million yuan, 663 million yuan and 830 million yuan respectively, and the EPS is 0.11,0.13,0.16 yuan respectively. The corresponding PE is 32 times, 27 times and 22 times.
Risk hints: Sino-US trade friction risk, macroeconomic downward risk, industry competition intensification risk, exchange rate fluctuation risk, credit risk