Main points of investment
In the first half of the year, revenue increased by 34.73% over the same period last year, and net profit from home increased by 18.50% over the same period last year, in line with expectations. In the first half of 17 years, the company achieved revenue of 193 million yuan, an increase of 34.73% over the same period last year, a net profit of 30 million yuan, an increase of 18.50% over the same period last year, and a gross profit margin of 40.85% and a net profit rate of 15.76%, down 0.97% and 1.75% respectively over the same period last year, in line with expectations. Of this total, the revenue in the second quarter was 105 million yuan, an increase of 42.84 percent over the same period last year, and the net profit was 14 million yuan, an increase of 10.57 percent over the same period last year. During the reporting period, the company achieved higher revenue growth business: low-temperature start-up devices increased by 60.16% year-on-year, shift controller and vehicle air-conditioning controller increased by 31.67% and 28.99% respectively, and electronic throttle pedal assembly increased by 10.11%. Affected by the rising prices of raw materials such as plastic particles upstream, profitability declined in the second quarter; however, due to the substantial increase in upgrading demand in the automotive electronics industry, and the company's car power electronic control system and body electronic control products to raise new production capacity will be completed one after another, the future revenue and performance growth is expected to gradually improve and achieve higher growth.
The boom in commercial vehicles has led to a high growth in demand for body electronic products. The company has been deeply engaged in the field of car body electronic control for many years, and has established cooperative relations with most heavy truck enterprises such as Sinotruk, FAW Liberation, Dongfeng Liuqi, Jianghuai, Weichai, Yuchai, Futian and so on. Benefiting from the higher-than-expected sales of heavy trucks in the first half of this year, the company's traditional automotive electronics, such as air-conditioning controllers and window controllers, have achieved high growth. In recent years, the company has increased its R & D investment in the field of automotive electronics (R & D personnel increased by 51% year-on-year in 2016 and 67.41% in the first half of 17 years). The products are extended to the field of power electronic control (electronic throttle pedal, shift controller, electronic throttle, cryogenic starting device, etc.), and actively develop the field of passenger cars. With the mass production of new customers and new models one after another, the company's automotive electronic products are expected to achieve high growth.
Entering a number of passenger car supporting systems, the successive launch of new production capacity will contribute to the growth of the company's performance. The company's IPO raised funds for the production capacity of new power electronic control products: 3 million sets of electronic throttle pedals, 1 million sets of shift controllers and 500000 sets of electronic throttle. The China report shows that the construction progress of the company's new production capacity has not yet reached 30%. In the future, with the completion of the new production capacity and the completion of the company's customer structure from business to business, it is expected to bring greater flexibility for performance growth.
Investment suggestion: we adjust the company's earnings per share from 2017 to 2019 to 0.39 yuan, 0.53 yuan and 0.73 yuan respectively, and the return on net assets are 11.4%, 13.8% and 17.8%, respectively. Maintain the "buy-A" investment rating and lower the six-month target price to 23.00 yuan, equivalent to 6 times the market-to-book ratio (PB) in 2018.
Risk hint: sales of matching models are lower than expected; the time for new capacity to reach production is delayed.