Q1 revenue increased dramatically. It is expected that large orders will become mainstream in the future, and quarterly fluctuations will continue
The company's 18-year revenue was 416 million yuan (-26.9%), net profit of 18.22 million yuan (-80.5%), gross profit margin of 34.5%, net interest rate 4.2%; 18Q4 revenue was 71.05 million yuan (-55.7%), Guimo's net profit was -331 million yuan (-12.34 million yuan in 18Q3), gross profit margin was 44.3%; 19Q1 revenue was 329 million yuan (+151%), net profit margin of 35.52 million yuan (+54.7%), gross profit margin 26.7%, net profit margin of 11.7%.
Revenue and profit in 19Q1 hit the highest value in 13 quarters since 2016. We expect that as the company's main customer concentration increases and the volume of single orders increases, the resulting cross-year settlement will have a big impact on seasonality. As the scale of new orders and revenue increases in the future, the “pulse” phenomenon of quarterly performance will increase.
Rising labor costs and high-end manufacturing demand drive the popularization of intelligent logistics
As domestic labor costs rise, sales of typical equipment to replace labor and improve labor efficiency, such as robots and forklifts, continue to grow. However, there is still a lot of human participation as part of the logistics process. In the future, logistics will continue to automate and upgrade equipment to the overall intelligent logistics system, so demand for intelligent manufacturing brought about by improving efficiency and reducing costs will be very strong in the future. According to GGII statistics and forecasts, the logistics automation system market is expected to reach 110 billion yuan in 2018, with a growth rate of about 37.5%, and CAGR of 25.3% over the past six years. The penetration rate of logistics automation in China is far lower than that of developed countries, and there will be very strong demand in the fields of tobacco, new energy, automobiles, electronics, pharmaceuticals, supermarkets, e-commerce, etc. in the next few years.
Practitioners connecting with the industrial Internet, implementing basic applications and upgrading intelligent manufacturing
On March 7 this year, the Ministry of Industry and Information Technology and the National Standardization Commission jointly issued the “Guidelines for Building a Comprehensive Standardization System for the Industrial Internet”, which indicates the direction and specific operation plan for the future industrial Internet, which is expected to accelerate the implementation of intelligent manufacturing applications. As the scale effect of electric rollers, AGVs, stackers and other products brings about cost reduction, it will accelerate the spread of intelligent logistics equipment in China; and with the popularization of technologies such as QR codes, machine vision, and high-speed sorting, the systematic upgrading of various factories and e-commerce will also be gradually realized and connected to the industrial Internet.
As one of the leaders in intelligent logistics equipment in China, the company has achieved expansion capabilities in multiple industries, from tobacco, new energy (lithium batteries), food, household chemicals, etc. in 2016 to supermarkets, petrochemicals and other fields in 2018. It is expected that in the future, with the demand for intelligent logistics in more fields, breakthroughs in automotive, electronics, pharmaceuticals and other fields are expected.
Profit forecasting and investment ratings: In the context of increasing labor costs and increasing demand for automation in various fields, demand in the intelligent logistics industry will continue to grow. The company's excellent product technology shows leading competitiveness in fields such as tobacco lithium batteries, and is continuously expanding its customer base, which is also in line with future industrial Internet development trends. Since the settlement of the company's big orders on New Year's Eve is obvious, we predict that the company's net profit from 2019 to 2021 will be 135 million yuan, 175 million yuan, and 229 million yuan respectively. EPS is 0.49 yuan, 0.63 yuan, and 0.83 yuan respectively. The “buy” rating, the target price is 19.6 yuan, and the corresponding profit for 19 years is about 40 times PE.
Risk warning: Declining economic sentiment affects industry demand; rising raw material prices affect profitability; development of new products and new customers falls short of expectations; delivery of large orders confirms New Year's Eve, leading to revenue spans.
