There's a turnaround. Aluminum smelting lifting equipment has always been an important part of the company's traditional main business. In 2016, revenue from aluminum smelting lifting equipment increased by 9.62 percent compared with the same period last year, steel smelting lifting equipment revenue increased by 30.39 percent, and lifting accessories revenue increased by 49.25 percent year-on-year. The price of aluminum and other metals continued to rebound in 2016, with the spot price of aluminum ingots rising from 10000 yuan / ton to about 13000-14000 yuan / ton. electricity consumption for aluminum smelting maintained steady growth, with an increase of more than 30 percent in January and February compared with the same period last year. Aluminum Corporation Of China Ltd issued a 16-year performance forecast, and the net profit of returning home increased 85% compared with the same period last year. The subsidiary Ureko successfully signed the sales contract of China's first automatic zinc stripping unit and brushing unit in non-ferrous smelting equipment. The profit improvement of downstream enterprises (from the side, Zhuye Group has issued a profit forecast (turnround) announcement), will also increase the demand for high-end products. On the whole, the profit level of non-ferrous smelting enterprises remains stable, which helps to improve their willingness to invest in equipment, and the traditional main business part of the company is expected to pick up.
Huaxin Mechatronics consolidated table for the whole year, exceeding the promised performance. The company completed the acquisition of Huaxin Machinery in July 2015. The actual combined net profit of Huaxin Machinery in 15 years is about 44.9664 million, and the net profit deducted from non-return for the whole year of 15 years is 65.7072 million. 16 Huaxin Mechatronics consolidated for the whole year, realizing income of about 606 million, net profit of about 71.775 million, and net profit of 70.9505 million after deducting non-return, an increase of about 7.98% over the same period last year and exceeding the promised value of 67 million. The company has made smooth progress overseas, winning overseas projects such as Dubai Port Airport and Malaysia. Huaxin Machinery committed net profit of 71.2 million in 2017. Huaxin Machinery is expected to maintain steady growth with the recovery of mid-stream manufacturing, the stable development of port freight and power, and the continuous expansion of overseas markets.
The layout of the new business is perfect and thriving. The company insists on the transformation from traditional products to high-end intelligent equipment and new energy industry: (1) in February 16, the company jointly launched Guangzhou Yipo New Energy, which will focus on investment in power battery manufacturing equipment for new energy vehicles; (2) in June 16, it launched the establishment of Tianqiao Liheng parking equipment Company and undertook three-dimensional parking garage projects such as Shenlong City in Zhuzhou and Tianyuan Government in Zhuzhou City. The company is expected to further expand the business of smart equipment and new energy industries, and achieve the rapid development of new industries.
Profit forecast. The performance of the company is stable, and the layout of high-end equipment is also advancing in an orderly manner, which is expected to continuously improve the performance of the company. We estimate that the 17-19 year net profit of the company will be 1.20,1.42 and 161 million yuan, corresponding to 0.14,0.17,0.19 yuan of fully diluted EPS. Combined with the average valuation of the comparable company, we give the company a price-to-earnings ratio of 60 times 2017 and a target price of 8.40 yuan.
Risk hint: traditional business performance fluctuates, new business layout and development do not meet expectations.
