Event
The company announced its annual report in 2019 that its revenue was 3.398 billion yuan, down 0.5% from the same period last year, with a net profit of 650 million yuan and a loss of 3.15 billion yuan in 2018, which was in line with the performance forecast.
Brief comment
(1) the company completes the processing of Longxin technology. ① transferred Longxin Technology to the bail-out fund at a price of 400 million yuan. In June 2019, the company signed an agreement with the Nanjing Zijin Guanjie Private Enterprise Rescue Development Fund to transfer 100% equity in Longxin Technology to the bail-out Fund at a total price of 400 million yuan. the agreement stipulates that if the income from the disposal of Longxin Technology by the bail-out development fund is less than 400 million yuan (inclusive), the disposal income will all be owned by the bail-out fund, and the insufficient portion will be compensated by the differential compensation of the 0.43 million shares pledged by 12 managers. If the income from the subsequent disposal of Longxin Technology by the bail-out fund is more than 400 million yuan, 90% of the disposal income of more than 400 million yuan will be owned by Connie Electric, and 10% will be owned by the bail-out Development Fund. The company formally spun off Longxin Technology in its financial report in October 2019 and received 240 million and 160 million transfers from the bail-out fund in October 2019 and February 2020. ② transfers the accounting treatment of Longxin Technology: the net income of stripping Longxin Technology is about 247 million yuan. The company received 400 million yuan in share price transfers, of which 203 million yuan was included in the capital reserve and 197 million yuan in investment income. Combining the investment income and Longxin's net assets, the net profit contribution of stripping Longxin Technology was 247 million yuan.
(2) the lower non-net profit of the company is mainly due to the merger of the net profit of Longxin Technology. The company achieved net profit of 650 million yuan in 2019, deducting non-net profit of 259 million yuan, of which the non-recurrent profit and loss reached 391 million yuan, and most of the non-recurrent profit and loss was 380 million yuan on the disposal of non-current assets. the profit and loss on the disposal of non-current assets mainly deducts 247 million of the net income of Longxin Technology and deducts the net profit generated by Longxin Technology-139 million yuan (in October 2019, Longxin Technology was officially spun off. Therefore, the performance includes the net profit of Longxin Technology from January to October 2019-139 million yuan, which needs to be deducted after divestiture, that is, minus the negative net profit). The process is as follows: the company merges the annual performance of the headquarters and the profit of Longxin Technology before October 2019 (- 139 million yuan), and then the net income generated by Longxin Technology is 247 million yuan. Then we need to deduct the net profit of Longxin Technology (that is, minus the negative net profit), from which we can judge that the lower non-profit deduction of the company is mainly due to the merger of the net profit of Longxin Technology, and the net profit of our department in 2019 is about 400 million.
(3) the high growth of the main business door system and the improvement of profitability are the main driving factors for future development. In 2019, the company's track door system business accounted for 69% of the main business income (excluding Longxin Technology), with a revenue of 2.318 billion yuan. About 70% of the door system revenue is the urban rail door system, and about 30% is the EMU door system. The company door system is mainly divided into urban rail door system (including urban rail vehicle internal and external doors, station screen doors / safety doors, station gate doors, etc.), EMU door system (including EMU inner and outer doors, etc.) The market share of the company door system is in the leading position in China, the market share of the urban rail vehicle door system is more than 50%, the shielded door market of the urban rail station is about 30%, and the market share of the gate gate system of the urban rail station is about 10% (the main market is occupied by foreign capital). The market share of the outer door system of the bullet train is more than 50%, and the market share of the inner door system of the bullet train is more than 70%. On the one hand, the revenue of the company's door system increased by 30.16% compared with the same period last year, mainly due to the intensive delivery of orders related to urban rail transit in 2019, and on the other hand, the gross profit margin of the company's door system increased by 39.13% compared with the same period last year, mainly due to the further intelligent and automatic transformation of the production line, which improved the efficiency and reduced the cost.
(4) the new urban rail and the bullet train maintenance market promote the continuous growth of the company's door system. Benefiting from the arrival of urban rail transit and EMU grade 4 and 5 repairs in the next 3 years, the rail gate system space corresponding to urban rail and high-speed rail in 2020-2022 is 65.7,75.3 and 10.47 billion yuan respectively, and the industry space continues to grow. at the same time, the company's new energy bus door system and overseas markets are actively expanding to open up growth space for the company.
(5) Investment suggestions: it is estimated that the company's revenue from 2020 to 2022 will be 3874.98, 4542.65 and 5337.98 million yuan respectively, an increase of 14.03%, 17.23% and 17.51% respectively over the same period last year, and a net profit of 461.80, 553.57 and 667.10 million yuan, an increase of-28.99%, 19.87% and 20.51% over the same period last year, corresponding to a PE of 14.22,11.86,9.84 times.
(6) risk hint: railway investment is not as expected; urban rail investment is not as expected.