Performance Overview
In the first half of 2017, the company achieved operating income of 2.27 billion yuan, an increase of 12.88% over the same period last year, and the net profit belonging to shareholders of listed companies was 21.26 million yuan, an increase of 0.03% over the same period last year.
Business analysis
The operation of the traditional heavy loading plate is stable, and the operating cash flow has improved significantly. During the reporting period, the company continued to promote the two-wheel drive of "traditional kinetic energy" and "new kinetic energy", and the "traditional kinetic energy" represented by heavy equipment, engineering sets, energy saving and environmental protection equipment industry operated stably. In the first half of the year, the beneficial demand picked up, the company's performance increased slightly, the cash flow improved significantly, and the net cash flow of operating activities was 300 million yuan, an increase of 221% over the same period last year. Heavy equipment plate achieved business income of 1.089 billion yuan, successfully signed a number of mainframe product orders such as Heilongjiang Duobaoshan, Xinfa Group Alumina and so on. The income of the complete set of engineering plate is 520 million yuan, the company continues to launch new energy-saving complete projects, the sintering waste heat power generation project is carried out smoothly, Handan Iron and Steel 400 sintering machine waste heat power generation project is signed, and the high-efficiency furnace cold sintering machine waste heat power generation technology has been recognized by the industry. The market demand of the heavy machinery industry recovered somewhat in the first half of the year, but affected by factors such as the rise in raw material prices, the industry is in the stage of adjustment and recovery, and the company's gross profit margin fell 3.78 percentage points compared with the same period last year.
The business income of the "new kinetic energy" sector, represented by the robot and intelligent equipment industry, has increased significantly.
The company entered the field of special industrial robots through the acquisition of 80% stake in Tangshan Kaicheng, and the first phase of the Luoyang headquarters special robot industrial base project was put into production in September 2016. In the first half of this year, the robot and intelligent equipment sector achieved business revenue of 456 million yuan, an increase of 70.58% over the same period last year, which is currently the company's main profit growth point. The fire-fighting robots developed by the company have been successively installed in Jiangsu Province Fire Corps, Luoyang Fire Detachment and Xuzhou Fire Detachment, and inspection robots, underwater robots and detection robots are being comprehensively promoted to the market.
It is proposed to acquire Tianjin Songzheng to create a new energy vehicle business growth point. In July this year, the company announced that it planned to acquire a 52.38% stake in Tianjin Songzheng for 690 million yuan by issuing shares and paying cash. Tianjin Songzheng is located in the electric control industry of new energy vehicles, specializing in power system solutions and core components of new energy vehicles, and is a leading hybrid bus system provider in China. The main customers include Xiamen Jinlong, Xiamen Golden Travel, ZTO Express bus, Ankai bus and so on. Benefiting from the high prosperity of the new energy vehicle industry, the company has entered a stage of rapid development in recent years. Tianjin Songzheng achieved an operating income of 687 million yuan and a net profit of 94.79 million yuan in 2016. the company's performance commitment is not less than 168 million yuan in 2017-2018 and 137 million yuan in 2019. Relying on Tianjin Songzheng's mature technology and strong R & D capability, the new energy vehicle business is expected to add new development momentum for the company.
Expand the international market with the help of the "Belt and Road Initiative" strategy. The company continues to strengthen overseas business management, with the implementation of the "Belt and Road Initiative" strategy, strengthen international market development and product structure adjustment, and constantly improve product quality and service level. During the reporting period, the equipment of the Dominica Esterilla Group cement grinding station project contracted by the company was in stable operation, and the Cambodia CMIC project contracted by the company was the largest and most advanced cement production line in the country. The company's representative overseas projects also include the waste heat power generation project in Pakistan, the KSO gold project in Laos, the Peru iron ore project in Shougang, and the copper project in Ecuador, laying the foundation for further expansion of the international market.
Profit forecast
We forecast that the company's operating income from 2017 to 2019 will be 44.9 pesqis 48.5 / 5.15 billion yuan, an increase of 19%, 8.0%, 6.2% respectively over the same period last year; the net profit attributable to the company will be 63 Planca, 165 million; and the EPS will be 0.014, 0.02, and 0.04 respectively.
Investment suggestion
We believe that the operation of the company's traditional heavy equipment plate tends to be stable, and the robot and intelligent equipment plate has achieved substantial growth; the company intends to acquire Tianjin Songzheng to create a new energy vehicle power system and parts business growth point; with the help of the "Belt and Road Initiative" strategy, increase international market expansion and equipment exports. Maintain the company's "buy" rating, with a target price of 7.2-8.5 yuan for the next 6-12 months.
Risk hint
The risk of a sharp rise in raw material prices, the risk of acquisition business integration, the risk of overseas business expansion.