First, the construction machinery boom slightly warmer
Construction machinery boom slightly warmer, Liugong third quarter decline narrowed. This year, benefiting from the rapid growth of the country's commercial housing market sales, construction machinery industry boom has improved. In the first three quarters of 2016, China's excavator sales totaled 50930 units, an increase of 12.8%. Liugong third quarter performance began to improve, operating income of 1 billion 399 million yuan, an increase of 2.93%, net profit of -970 yuan to the parent, compared to last year -6420 million loss of the same period level narrowed substantially.
Two, profitability improved
The cost reduction effect is obvious, and the profitability is improved. The company actively took down cost control measures, the third quarter sales expenses, financial costs and asset impairment losses were down by 12.72%, 36.93% and 97.89%, respectively, profitability improved significantly. In addition, the company's third quarter should be the ratio of accounts receivable and revenue was 0.31, significantly lower than the average level of 0.68 of the same industry, we think that the bad debt impairment risk facing the company is low, can provide guarantee for steady growth performance.
Three, the international transformation continues to speed up
The company continued to promote the construction of global marketing network, the implementation of international business strategy, "4K" in April this year, the company a full range of products exhibition in Germany Munich BMW exhibition, and signed a global cooperation agreement with the United States Cummings service and parts. In June, the company signed an agreement with Poland national R & D center to build Liugong Europe R & D center. In addition, with the "The Belt and Road" strategy to accelerate the company, close to the South Asian region have the advantage, loaders, excavators, graders, bulldozers, loaders and other mining products exports continue to maintain the forefront of the industry.
Four, investment proposals
Expected 2016-2018 years net profit of 18, 153, 328 million yuan, corresponding to EPS were 0.02, 0.14, 0.29 yuan / share, according to the November 10th share price of 7.45 yuan, corresponding to PE were 470, 55, 26 times. We believe that the profitability of the company is stable, with the construction machinery industry boom and internationalization of the transformation of the promotion, the future performance is expected to significantly improve, the first coverage to the company "overweight" rating.
