Stabilised CiXing shares: flat knitting machine

2015 results turnround main reason is that asset impairment losses fell sharply 77% year-on-year decline narrowed, shoe machine, flat knitting machine is mainly high-growth, robots (55.60, 0.950, 1.68%) outbreak of business growth; Business: business accounted for 77% of the computer flat knitting machine achieve revenue of 570 million yuan (13%), with rapid development of overseas markets such as Bangladesh, steiger, full computer flat knitting machine and so on product structure upgrade, we expect the 16 years in the business is expected to achieve 15% growth; Accounted for 7.4% of the upper machine to achieve revenue of $55.58 million (+ 47%), the company actively in jinjiang footwear such as to increase the promotion of industrial cluster. we expect the business growth in 16 years + 30%; Automation integrated business accounted for 10.6% of the revenues of 80.13 million yuan (+ 3015%), the company will increase this year industrial robot, service robot. VR business expansion, we expect the section 16 years big robot is expected to double.

 

We expect the whole 16 years performance is expected to achieve 70% growth.

 

During the steady rise of gross margin, the fee is moderate, asset impairment loss is expected to be down.

 

The company integrated gross margin was 40.4% in 2015, + 3.8 PCT year-on-year Points business, computer flat knitting machine's gross margin was 44.71%, compared with the + 3.55 PCT, main overseas sales accounted for improvement, high-end product structure improvement; Shoe machine gross margin of 33.94%, compared with 8.57 PCT, mainly because of the TBS market development initial stage; Automation integrated business gross margin was 18.58%, compared with the + 15.62 PCT, mainly because of business volume unit costs down improve profitability; Sales in 2015 fee, management fee, financial asset ratio of 13.59%, 16.41% and 7.64% respectively, compared with the + 0.33 PCT, 2.01 PCT, 0.33 PCT, rate overall stability. Asset impairment loss for 109 million, 15 years in the same period last year to 476 million, fell 77% year on year, 16 years is expected to gradually downward.

 

Outbreak of Bangladesh market + product upgrades, flat knitting machine CAGR is expected to be 15% + 3 years in the future.

 

Flat knitting machine products in domestic sales has narrowed, the future is expected to be a smooth transition; Overseas main Bangladesh market will gradually enter the high-growth interval of computer flat knitting machine instead of manual machine,we expect the current accounted for about 50% of the overseas sales are expected to enter the rapid growth of 30% +; Steiger, at the same time the whole computer flat knitting machine localization will effectively upgrade the product structure.

 

+ + VR pistachios robot automation system integration, human machine business worth waiting for.

 

Industrial robot system integration, the company in recent years have investment layout CiXing robot, suzhou ding, dongguan transit, involves the automated production line integration, automation testing, such as business, slightly lose 15 years, 16 years is expected to achieve scale rare; Service robot, the company in 2015, 2015 capital holding Beijing bloom interaction into the field of human-computer interaction, VR, image and speech processing (team of Chinese academy of sciences, technology, international advanced), at the same time 5000 joint venture with the optimal culture Wan Chengli pistachios robot focus on robotics, children have great potential for future growth.

 

Cash in hand more than 17, robots and Internet business extension strategy.

 

Profit forecast and investment advice: the company core business of flat knitting machine is moderate, + service robot + VR new layout automation system integration business is expected to fast volume, is expected to 2016-18 EPS to 0.37/0.21/0.28, corresponding PE64/48/36 x, to maintain "overweight" rating.