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Performance is in line with expectations, customized product line highlights high growth

Westdollar.com April 18, 2018 00:00 Soochow Securities Chen Xianfan, Ni Zhengyang View original PDF

Hongya CNC (002833)

The performance is in line with expectations, and the high growth of customized product line highlights: The company disclosed its 2017 annual report, which achieved a total revenue of 820 million yuan, a year-on-year increase of +53.6%, and a net profit of 234 million yuan, a year-on-year +51.2%. 2.08 billion yuan, +51.0% year-on-year. In terms of business, the company's main edge banding machine realized revenue of 429 million yuan, +37.5% year-on-year, accounting for 52.3% of the company's revenue, and sawing saws realized income of 178 million yuan, +50.7% year-on-year, accounting for 21.7% of revenue. The company's second largest business segment in 2017. It is worth noting that the two major sections of the CNC drilling and machining center, which are mainly customized production lines, have achieved rapid development. Among them, CNC drilling (including multi-row drilling) realized a total income of 116 million yuan, a substantial +183.1% year-on-year, accounting for 14.2% of the company's total revenue, +6.5pct year-on-year, and processing center business realized revenue of 0.46 billion yuan, +80.8% year-on-year. , also achieve rapid development. It can be seen that the high growth of the company's customized product line is fully reflected.

The asset quality is high and the three rates continue to decrease: The company's asset-liability ratio is 15.9%, which is still lower than 2016's +3.4pct, and there is no short-term borrowing, reflecting the company's high asset quality. Inventories of 119 million yuan, compared with the beginning of the period +71.1%, mainly due to the expansion of the company's production and operation scale, increased raw materials and semi-finished products inventory. The net cash inflow from the company's operating activities was 226 million yuan, up +41.8% year-on-year, and the payment status was good. In terms of three fees, the company's sales expenses were 9.87 million yuan, which continued to maintain a low level. Administrative expenses were 50.31 million yuan, +32.7% year-on-year. The equity incentives implemented by the company in 2017 led to an equity incentive fee of 15.61 million yuan this year, but the management expense ratio was only 6.13%, which was still 0.97pct lower than that of 2016, reflecting the company's strong management ability. On the whole, the company's three rates totaled 7.26%, which was continuously optimized compared to 2016-1.25pct.

The industry maintains rapid growth and consumption upgrades: In recent years, the continuous expansion of real estate construction areas such as residential, hotel and office buildings and the upgrading of furniture brought about by consumption upgrades have driven the rapid growth of the Chinese furniture industry. According to data released by the National Bureau of Statistics, in 2017, the main business income of China's above-scale furniture industry enterprises was 905.6 billion yuan, which continued to grow steadily. More importantly, the domestic consumer group's demand for overall life art and personality design promotes the rapid development of customized furniture, especially the whole house custom furniture industry. According to our company's depth in August 2017 [high-energy industry combined with outstanding companies, the company's growth is sustainable and certainty], the 2020 update + new demand is expected to bring 17 billion yuan to the panel furniture equipment enterprises. Demand, industry space is vast.

Benefiting from domestic import substitution, the export space is large: The company has excellent technical strength. The self-developed high-speed automatic edge banding machine, intelligent optimized CNC panel saw, CNC gantry machining center and other products have obtained Guangdong high-tech product certification. On the basis of certain technical strength, the company's products gradually expand market share by virtue of its applicability and cost performance. At present, the products have been sold to well-known furniture enterprises such as Sofia, All-Friends Furniture, and Good Lai Wardrobe. It is worth noting that the high-end products of domestic woodworking furniture equipment are not much different from international brands in terms of processing precision, product appearance and product structure performance. However, due to the obvious price advantage, the competitiveness of the export market is gradually reflected, especially in industrialization. Developing countries’ exports in the process have achieved remarkable results. The company's sales outlets in foreign countries have covered more than 40 countries and regions including Iran, Turkey, Australia, Southeast Asia, and the United States. The export business in 2017 was 202 million yuan, up +24.7% year-on-year, with considerable room for development. Investment suggestion: As a representative of science and technology innovation in the domestic panel furniture machinery industry, the company has outstanding performance in technology, product and management. Under the background of rapid consumption development and rapid development of customization, the company's high growth is sustainable and certain. It is expected that the company's EPS will be 2.26, 2.96, 3.72 yuan in 2018-20, corresponding to PE 25, 19, 15X, based on the medium and long-term of the company. The development is firmly optimistic and maintains a “buy” rating.

Risk warning: the progress of research and development of new technologies and new equipment is less than expected, and competition among peers is intensifying.

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Hongya CNC fundamental data
  • Total share capital of 135 million shares
  • Circulating shares of 0.54 billion shares
  • Earnings per share 1.21 yuan
  • Undistributed profit per share 3.88 yuan
  • Net assets per share of 7.69 yuan
  • ROE 16.07%
  • Net profit of 163.932 million
  • Net profit growth rate 33.54%
Hongya CNC Investment Rating
Overall rating in January
Overall rating in March
Statistical period Buy Overweight neutral Reduction Sell total
Within one month210003
Within three months420006
Within six monthstwenty two400026
Within a year30500035
Hongya CNC profit forecast
                                index 2017A 2018E 2019E 2020E
Earnings per share (yuan) 1.73 2.39 3.14 4.00
Net profit (100 million yuan) 2.34 3.24 4.25 5.41
name Quote change Number of research reports Institutional investment rating (nearly six months)
Buy Overweight neutral Reduction Sell
N Jiechang 43.98% 0 0 0 0 0 0
Zhongqian shares 10.00% 0 0 0 0 0 0
Saddle weight 9.97% 0 0 0 0 0 0
Pilot intelligence 4.14% 25 13 12 0 0 0
Xiongdi Technology 3.84% 1 1 0 0 0 0
Meiya Optoelectronics 3.83% 11 3 8 0 0 0
Hongyu shares 3.63% 0 0 0 0 0 0
Yi Jiahe 3.48% 7 2 5 0 0 0
Oriental Seiko 3.40% 2 1 1 0 0 0
Chuangli Group 3.32% 0 0 0 0 0 0
Shenghong shares 3.15% 0 0 0 0 0 0
Rongtai Health 2.84% twenty two 13 9 0 0 0
Huaming equipment 2.79% 0 0 0 0 0 0
Hongya CNC 2.67% 19 14 5 0 0 0
Jinchen shares 2.59% 2 1 1 0 0 0
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