Abstract Yellow River Cyclone (7.23, -0.050, -0.69%) (600172): Dynamic evaluation performance in line with expectations, fundraising projects to boost high growth Yellow River Cyclone 600172 non-metallic building materials industry Research institutions: Great Wall Securities analyst: Connaught writing day ...
Yellow River whirlwind (7.23, -0.050, -0.69%) (600172): Dynamic evaluation results in line with expectations, fundraising projects to boost high growth Yellow River Cyclone 600172 Non-metallic building materials industry Investment Advice:
Considering the better control of the volume and cost of the fundraising project, we slightly raised the previous earnings forecast. The company's 2013-2015 earnings per share are expected to be 0.43, 0.54, and 0.63 yuan, corresponding to the dynamic PE of 15X, 12X, and 11X. There is an upside in the valuation of the company. Taking into account the continued prosperity of the industry, the company's competitive advantage is obvious, the polymer chip business is expected to exceed expectations, we maintain the "recommended" rating.
Key points:
The results are in line with expectations. The company released the first quarterly report of 2013. In the first quarter of 2013, the company achieved operating income of 373 million yuan, a year-on-year increase of 32%. The net profit attributable to shareholders of listed companies was 0.5 billion, up 30.6% year-on-year, and the basic earnings per share was 0.09 yuan. In line with our expectations.
The fundraising projects gradually increased in volume and the profitability improved steadily. The company's gross profit margin in the first quarter of 2013 increased by 0.3 percentage points year-on-year, mainly due to the gradual mass release of polycrystalline composite sheets and pre-alloyed powders, and the company's profitability will continue to increase steadily with the gradual production of high-end products.
During the period, the expense ratio decreased slightly and the asset impairment loss increased significantly. During the first quarter of 2013, the expense ratio was 16.85%, down 0.2 percentage points year-on-year, mainly due to a slight decrease in sales expenses. In the first quarter, the asset impairment loss was 4 million, a year-on-year increase of 525%, mainly due to the significant increase in provision for bad debts.
Accounts receivable and accounts payable increased significantly. Accounts receivable increased by 90% from the beginning of the period, mainly due to the write-off of the company's products; accounts payable increased by 92.29% compared with the beginning of the period, mainly due to the increase in the purchase of raw materials for raw and auxiliary materials.
Leading companies will continue to fully benefit from the continued prosperity of the industry. It is expected that the growth rate of industry demand will remain above 15% in the next three years. Two factors support the long-term demand potential of the industry: First, the demand for diamond substitution will continue to exist; Second, the exploration and exploitation of new energy (1038.65, 0.000, 0.00%) will give Superhard materials bring new demands. As a leader in super-hard materials, the company has obvious advantages in terms of scale, channel and production equipment. With the increase of market concentration, the company's traditional business will continue to grow steadily. We expect the company's output to grow at a rate of about 2 carats per year.
The fundraising project is expected to exceed expectations in 2013:
Polycrystalline composite sheet: Polycrystalline composite sheet is the most promising part of our diamond industry chain. First, demand will continue to increase rapidly with the upgrade of energy exploration in China; second, the entry barrier is higher than that of diamond single crystal particles. The company's products are expected to gradually enter the field of natural gas extraction. It is expected that the output will reach 7 million pieces in 2013, contributing EPS 0.06 yuan.
Pre-alloy powder: The company has obvious advantages in this business and is almost in a monopoly position. It is estimated that the output in 2013 is expected to reach 6,000 tons, contributing EPS 0.1 yuan.
Risk warning: the fundraising project is lower than expected; the industry boom is down.
Boshen Tools (0.00, 0.000, 0.00%) (002282): calmly respond to anti-dumping, equity transfer and increase profits and deep tools 002282 machinery industry
Anti-dumping reduces corporate profits. The company recently received the "Report on the Progress of the United States on Anti-dumping Cases Originating from Chinese Diamond Saw Blades". Due to the higher initial tax rate for the second annual administrative review, it is expected to reduce the company's 2012 net profit by approximately RMB 18 million.
Thailand set up factories to evade anti-dumping measures and open up the Indian market. The company plans to produce saw blades in Thailand. Products exported from Thailand to Europe and the United States have zero tariffs. The lower tariffs between Thailand and India are good for opening up the Indian market. Thailand's local commitment to the company is an eight-year income tax rate of zero. Considering factors such as labor costs and land costs, production in Thailand may be cheaper and more profitable. This year, the Thai subsidiary has gradually put into production.
Transfer of equity to increase profits. The company disclosed the announcement on December 20, 2012. According to the announcement, the company transferred the entire equity of Shijiazhuang Tiantong Light Vehicle Co., Ltd. and 50% equity of Shijiazhuang Tiantong Automobile Manufacturing Co., Ltd., which enabled the company to obtain investment income and increase the company's 2012 annual net. The profit was 25.76 million yuan. Therefore, the anti-dumping case and the equity transfer of Tiantong Company are expected to increase the company's net profit attributable to shareholders of the listed company in 2012 of approximately RMB 7.76 million.
Investment suggestion: The main downstream products of the company are real estate, infrastructure and manufacturing. It is expected that the government's investment will rebound moderately next year, the real estate recovery and the economy of Southeast Asian countries will continue to grow. Therefore, we believe that the company's operating income will be slightly better than this year. With the emergence of new product scale effects and cost control, the gross profit margin may continue to decline. We expect the company's operating revenue growth rate to be 10%, 15%, and 15% in 2012-2014, respectively, and EPS is 0.21 yuan, 0.25 yuan, and 0.30 yuan. The closing price on December 19, 2012 was 6.88 yuan, which corresponds to a 2012 valuation of 32 times. Maintain “Neutral-A†investment rating.
Risk warning: the risk of a decline in economic growth. Exploit the unfavorable risks of the market. The anti-dumping of diamond tools is unfavorable and the risk of exchange rate fluctuations. The risk of rising raw material prices.
SFD (0.00,0.000,0.00%) (300 179) a quarterly review: return to growth performance in construction projects to be put into four categories up to 300,179 non-metallic building materials industry
In the first quarter of 2013, the company achieved a total operating income of 29.2961 million yuan, an increase of 3.84%; realized operating profit of 799.200 million yuan, an increase of 1.02%; the net profit attributable to the company's common shareholders was 7,320,400 yuan, a year-on-year decrease of -18.8% Realized earnings per share of 0.06 yuan. The main reason for the year-on-year decline in the company's performance was the decline in gross profit margin and the reduction in government subsidies.
During the reporting period, the company's gross profit margin was 40.06%, a decrease of 7.33 percentage points year-on-year and an increase of 1.28 percentage points from the previous month; the net profit rate was 24.99%, a decrease of 6.96 percentage points year-on-year and an increase of 4.96 percentage points from the previous month. In terms of profitability, although the year-on-year decline was more, the chain has improved.
During the reporting period, the company's period rate was 17.08%, a year-on-year decrease of 1.22 percentage points. Specifically, the sales expense ratio increased by 1.50 percentage points, indicating that the company's sales force increased; the management expense rate decreased by 2.08 percentage points; the financial expense ratio decreased slightly. The company's period expense ratio was generally stable, but did not show a significant trend decline.
The situation of fundraising and over-raising projects: The composite super-hard material products project is expected to be put into production in early September 2013; the PCD/PCBN composite sheet industrialization project for metal cutting and the polycrystalline diamond compact (PDC) pick and Drill bit industry The project is expected to be commissioned in early November 2013.
Since the three key projects of the company are in the second half of 2013, the company's performance this year will not be fully reflected. Therefore, it is expected that the company's performance this year should not have a big growth, the overall should be based on stability.
The company's earnings per share for 2013, 2014 and 2015 are expected to be 0.31, 0.46 and 0.58 yuan respectively. The short-term company valuation is high, but taking into account the company's long-term growth potential, maintain a cautious recommendation rating for the company.
Risk: The sales of new products are less than expected.
Yu Diamond (4.92, 0.000, 0.00%) (300064): increase the income without increasing profits, expecting the single crystal micropowder to release the amount of Yu Diamond 300064 basic chemical industry
Maintain an investment rating of “strongly recommend-A†for the company. At present, the company's business has covered graphite ore, synthetic diamond and equipment, large single crystal, micro powder, micro diamond wire, resin wire, grinding wheel and other fields. In the short-term, some equipment of the 1.02 billion carat high-grade diamond project has entered the stage of commissioning and trial production. The profit increase in 2013 mainly comes from the increase in the volume and price of single crystal and fine powder. In addition, from 2013 to 2015, the amortization of option costs was gradually reduced (11,118,300 yuan, 4,099 million yuan, 911,300 yuan). We conservatively expect the company's 2013 and 2014 EPS to be 0.37 yuan and 0.49 yuan respectively, corresponding to PE valuation of 13.5X, 10.2X. Maintain "strongly recommended -A" rating.
Risk factors: the recovery of the construction and building materials industry, the progress of fundraising projects is lower than expected;
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