Main points of investment
Profit improvement narrowed, forming two main industries, high-end energy equipment and new energy vehicles, looking forward to high growth.
When the company released its 2016 annual report, the revenue / return net profit was respectively 9001 million yuan, down 10.54% and 24.09% compared with the same period last year, although slightly lower than we expected, but the downward trend slowed down. During the reporting period, the company's revenue from coal machinery products was 672 million yuan (down 13.89%), accounting for 2.90 percentage points to 74.63%. The revenue from coal trade was 171 million yuan (down 22.72%), accounting for 18.99%. The new energy vehicle business entered the harvest period, and the revenue from the new automobile trading business was 54 million yuan. Due to the continued downturn of the coal machinery market, revenue and net profit declined to varying degrees during the reporting period, but the rebound in coal prices narrowed the decline in performance, steadily improved profitability, and the comprehensive gross profit margin increased by 3.28 percentage points to 40.91%. In the future, with the steady recovery of coal machinery business and the outbreak of new energy vehicle business, the company is expected to enter the high growth channel. At the same time, the company announced that it plans to distribute 0.2 yuan (including tax) in cash for every 10 shares.
High-end coal machinery industry leader, big marketing strategy to promote stable growth. The company is one of the leading suppliers of high-end coal machinery equipment in China. The existing shearer / roadheader 28xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Now we are actively expanding the field of electrical automation to realize the all-round development of mining, digging and electricity. The company insists on independent research and development and has obtained 95 patents. With Yangquan Coal Industry, Xishan Coal Power and other state-owned coal group enterprises to set up local joint ventures to expand the sales market with the advantage of being close to the coal producing area, long-term cooperation with high-quality customers and equipment renewal demand are expected to effectively ensure the sustainability of the company's performance. The rapid recovery of the coal and coal machinery market is expected to lead to a substantial increase in related orders in 2017.
Transform the layout of new energy vehicles, increase inside and outside, and create the whole industry chain of "three electricity". The transformation of the company's new energy vehicle is progressing steadily. At present, core components such as BMS, battery pack and charging piles have been formed, as well as the layout of the whole industry chain of vehicle operation. During the reporting period, the company increased the capital of Chuanglipuyu, which can produce 20, 000 sets of new energy vehicle chargers, DC/DC converter / intelligent high voltage distribution box and 5000 charging piles per year. At the same time, Hefei, a holding subsidiary, has an annual output of 200 million Ah of new energy electric vehicle battery Pack, 30,000 motors and controllers, which is expected to increase the after-tax net profit by 150 million yuan per year.
In addition, the controlling shareholder participates in the acquisition of 70.37% stake in Yineng Electronics, and in the later stage, if the company is injected into the company, it will make a further progress on BMS, and the omni-directional layout of the company's new energy vehicles is expected to bring huge profits.
Expand the new mode of financial leasing, the operation of new energy vehicles is expected to form coordination. During the reporting period, the company established Zhejiang Chuangli Financial Leasing Company to provide strong backing for its business development and financing channels, and at the same time promote linkage with coal mining machines to increase the recovery capacity of accounts receivable. The company's new energy vehicle operation company has been actively laid out in various places, and Sun companies in Taiyuan, Xi'an and Hefei have landed one after another. The model of financial leasing is expected to be extended to new energy vehicle operation and other industrial sectors in the future, forming effective coordination and strong backing.
Risk hint. 1, the growth rate of the new energy vehicle industry is not expected; 2, the project process is not up to expectations.
Profit forecast and valuation. Maintain the company's 18-year EPS forecast of 0.27 EPS 0.35 yuan (after the latest dilution), and give a 19-year Universe forecast of 0.45 yuan. The current share price corresponds to the annual PE of 35Unix, 27Unix, 21x in 2017-18-19. It is optimistic that the coal machinery business will be warmed up and the layout of new energy vehicles will drive the rapid growth of performance in the future, giving the company 50 times PE in 17 years. Maintain the company's "buy" rating and lower the target price to 13.5 yuan.