The company released its 2016 annual report on March 9, 2017, with operating income of 1.042 billion yuan, down 8.87% from the same period last year, and net profit belonging to the parent company was 17 million yuan, down 7.3% from the same period last year. The return on equity is 1.8%.
Fierce competition in the industry, aluminum business into the promotion period, the company's 2016 revenue decline is mainly due to increased competition in the industry, the "cost + gross margin" pricing model forced the company's gross profit margin to decline. The various costs brought about by the fund-raising project have increased, but the benefits have not been fully released, which has affected the performance to a certain extent. Since 2017, the company has increased the aluminum die, a new product in the profile, with a higher gross profit margin and optimized the company's product structure.
Raising and investing to promote the upgrading of business structure, the company directed to issue shares to raise 457 million of the net funds raised for the production and construction project of energy-saving, environmental protection, high-performance aluminum alloy building formwork with an annual output of 400000 square meters, and supplement working capital. The project is expected to reach the scheduled state of use on December 31, 2017, and gradually reach production in three years, with an average annual operating income of 520 million and a net profit of 90 million, digesting the company's production capacity of 10,000 tons of aluminum profiles per year. improve the utilization rate of the 40,000-ton aluminum profile expansion project and realize the organic combination of the company's traditional business and new business.
With the construction of the 400000 square meter aluminum formwork project, the production and sales of aluminum formwork will be further expanded.
Major asset restructuring to expand the extension, the proposed acquisition of game voice interactive platform company.
Shares of the company were suspended from trading on October 12, 2016 due to planning major issues. The company intends to purchase 100% equity of Shanghai Qinhe by issuing shares and paying cash, and issue shares to raise part of the supporting funds to pay the cash consideration and intermediary fees of this transaction. The company has signed the Framework Agreement on the acquisition of Shanghai Qinhe Internet Technology Software Development Co., Ltd. Qinhe mainly operates online game voice interaction platform IS voice.
Profit forecast and investment advice: we expect the company's net profit from 2017 to 2019 to be 36.87 million yuan, 42.75 million yuan and 47.97 million yuan respectively. The corresponding PE were 159.33, 141.46 and 126.07, respectively.
In view of the substantial increase in the company's future production and major asset restructuring across the border. We give a "hold" rating.
Risk hint: industry competition aggravates risks and major asset restructuring fails.
