I. Overview of events
On April 19, the company released its annual report for 2018, with an annual operating income of 489 million yuan, an increase of 17.68% over the same period last year, and a net profit of 108 million yuan, an increase of 0.51% over the same period last year. The forecast of the first quarter results shows that the net profit of homecoming decreased by 37.18%, 45.55% compared with the same period last year, and the profit is expected to be 13 million yuan to 15 million yuan.
II. Analysis and judgment
Revenue growth accelerates, equity incentive amortization affects profits
In 2018, the company achieved operating income of 489 million yuan, an increase of 17.68% over the same period last year, mainly due to a 25.58% year-on-year increase in revenue from the company's ship automation system, and a net profit of 108 million yuan, an increase of 0.51% over the same period last year. The company's expense rate for the current year was 26.84%, an increase of 4.58pct from 22.26% in 2017, mainly because equity incentive fees amortization fees led to a substantial increase in management expenses by 68.70%, and an increase in R & D investment led to a 23.70% increase in R & D expenses. Gross profit margin was 49.22% in 2018, down slightly from the previous year. The forecast for the first quarter is that the net profit of return to the mother decreased by 37.18%, 45.55% compared with the same period last year, and the profit is expected to be 13 million to 15 million yuan, mainly due to the decrease in non-recurrent profit and loss, resulting in a decline in net profit.
The industry has gradually warmed up, and the matching of ships has continued to improve.
The company is a professional supplier of marine electrical and automation systems, which has focused on research and development in this field since its inception. At present, it has obvious first-mover advantages and has established a good long-term cooperative relationship with China Shipbuilding heavy Industry Group and China Shipbuilding Industry Group. In 2018, the revenue of the ship power distribution system was 209 million yuan, an increase of 6.81% over the same period last year, and the situation of the plate improved; the revenue of the ship automation system was 272 million yuan, an increase of 25.58% over the same period last year, and the growth rate was lower than that of the previous two years.
The gross profit margin in the main shipping sector has always been around 50%, but there has been a slight downward trend since 16 years. During the reporting period, the country accepted new ship orders of 36.67 million deadweight tons, an increase of 8.7% over the same period last year. At the end of December, hand-held ship orders were 89.31 million deadweight tons, an increase of 2.4% over the same period last year. At present, China's shipbuilding industry is showing a good situation in which the three major shipbuilding indicators remain in the lead. The 12th five-year Development Plan of Shipbuilding Industry has put forward the development goal of "substantial improvement of supporting capacity and level". An important breakthrough is expected to be achieved in the field of ship automation and system integration, and the company will benefit from policy planning. always strengthen the line of military-civilian integration, the future performance is worth looking forward to.
The completion of the first stock incentive is beneficial to the long-term operation and development of the company.
On September 20, 2018, the company disclosed that the first grant of restricted stock incentive had been completed, awarding a total of 8.659 million restricted shares to 85 directors, senior managers and business backbones at a price of 12.56 yuan per share.
The company will bind the future performance with the interests of senior executives, which will help to enhance the enthusiasm and creativity of employees, and promote the long-term development of the company.
III. Investment suggestions
As a leading supplier of marine automation and electrical systems in China, the company adheres to the strategy of civil-military integration, and we are optimistic about the long-term development of the company. It is estimated that the EPS of the company in 2019-2021 is 0.79,0.99 and 1.13 yuan respectively, corresponding to PE 32X, 26X and 22x, the average valuation of the comparable company is 108X, covering for the first time and giving a "recommended" rating.
IV. Risk hints
1. The shipbuilding industry continues to be in the doldrums; 2. The gross profit margin in the supporting field of ships is declining.