Tabl e _ Su: mm company ry] released the 2017 interim results report on August 22nd. During the reporting period, the company's operating income reached 828.74 million yuan, an increase of 29.35% over the same period last year; the total profit was 92.74 million yuan, an increase of 52.71% over the same period last year; the net profit belonging to shareholders of listed companies was 87.09 million yuan, an increase of 49.63% over the same period last year, deducting a 74% increase in non-net profit over the same period last year; net operating cash flow increased by 83% over the same period last year, achieving a substantial increase in the company's performance. The net profit in the first three quarters is expected to be 116 million-150 million, an increase of 38% Mel 78% over the same period last year.

Comments:

The construction of the power station is progressing smoothly, and the growth of EPC business is higher than expected. In line with the development trend of the industry, the company has successfully completed the strategic transformation from a single product provider to a solar integrated solution provider and a solar power plant operator. By the end of the reporting period, the company's independently invested grid-connected ground centralized photovoltaic power station reached 260MW, and the company's joint bid-winning 70MW power station project was also smoothly connected to the grid and progressing smoothly. The company's EPC business growth exceeded expectations, completed a total of 51MW during the reporting period, achieving operating income of 211.365 million yuan, a year-on-year increase of about 24 times. In the future, the company's own grid-connected power station plans to reach 1GW, which provides a strong support for the company's long-term and stable development.

Create a new marketing model, component sales achievements are not cheap. Taking advantage of the overall improvement trend of the industry in the first half of the year, the company increased the sales of components, deeply tapped the resources of major customers, and at the same time used the project EPC and roof distributed EPC to drive the company's component sales, constantly innovating the marketing model, and achieved sales revenue of 427.6 million yuan for crystal silicon components in the first half of the year, an increase of 18.08% over the same period last year.

Actively expand overseas markets, the vanguard of "Belt and Road Initiative". Under the guidance of the national "Belt and Road Initiative" policy, the company has shifted its focus of international market development from traditional markets such as Europe and the United States to markets such as Southeast Asia, the Middle East, Africa, India, Pakistan and South America, and went deep into the "Belt and Road Initiative" region. and actively develop emerging markets, selling the whole set of production lines to customers in Pakistan and India, which not only avoids risks, but also brings new opportunities for the company.

Profit Forecast:

We believe that the company's whole industry chain business model lays a solid foundation for the company's sound and long-term development, and the low-leverage financial structure provides financial support for the company's further expansion, which can achieve steady counter-cyclical growth. In addition, the company's cost control ability and anti-risk ability also protect the next step of the development of the company, the future does not rule out the possibility of becoming bigger and stronger. The corresponding EPS from 2017 to 2019 is 0.19,0.29,0.36, maintaining the "buy" rating, with a target price of 6.50 yuan.

Risk Tips:

Photovoltaic policy risk, the company's power plant business is not as expected, component sales are not as expected, overseas expansion is not as expected.