报告名称：Kangni Mechanical & Electrical(603111)Rail transit door systems and AFV part
报告类型：点评报告
报告日期：2016-04-20
研究机构：中金公司
股票名称：康尼机电
股票代码：603111
页数：8
简介：1Q16 results beat expectations
In 1Q16, operating revenue +33.5% YoY to Rmb440mn and netprofit +38.8% to Rmb49.66mn, beating forecasts.
Operating revenue and GM both increased. Revenueexpansion was mainly driven by the main business of rail transit– the rapid growth in HSR and urban rail transit doors inparticular – as well as the continued rapid growth of salesrevenue from AFV parts. Blended GM edged up 0.8ppt to 37.0%.
Expense ratio sank; net profit margin increased. Due toeconomies of scale, its sales expense ratio and financial expenseratio decreased 0.8ppt and 0.4ppt respectively. G&A expenseratio grew 0.5ppt YoY as R&D spending rose by Rmb14.28mn. In1Q16, MI increased Rmb3.4mn YoY to Rmb3.15mn due toincremental controlling subsidiaries in 2015. Net profit margingrew to 11.4%, +0.4ppt YoY.
Net outflow from operating activities. As of end-1Q16,balance of inventory/accounts receivable grewRmb18.33mn/97.81mn vs. year-start. Accounts payable fellRmb95.63mn; and, net outflow from operating activities wasRmb110mn (+Rmb27.01mn YoY)
Trends to watch
Beneficiary of rising subway mileage, considering thissegment’s high revenue contribution. According to ourbottom-up statistics, 434km of subway was completed in 2015(+32% YoY); we forecast a further 658km/1,072km completedin 2016/17 (+52%/+63% YoY). As subway accounts for 44% ofits total revenue, Kangni will likely benefit from rising mileage.
Revenue from AFV parts should continue to double in2016/17e, contributing 15% revenue in 2017; M&A in AFVparts to progress and stronger position in the market
Valuation and recommendationMaintain 2016/17 EPS forecast at Rmb0.83/1.09. The stock istrading at 34.4x/26.3x 2016/17e P/E. Maintain TP atRmb37.2, implying 45x 2016e P/E.
Risks
Import substitution of MU door and AFV expansion miss.

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