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Canny Elevator:Earnings in line with expectations;gross margin up sharply

发布时间:2016-08-25    研究机构:瑞银证券

Q: How did the results compare vs. expectations

A: H1 revenue was Rmb1.63bn, up 11% YoY; net profit attributable to the parent wasRmb240m, up 22% YoY, in line with our full-year estimate of 23%. Net profit growthquickened largely because gross margin rose 3ppts YoY to 38.2%.

Q: What were the most noteworthy areas in the results

A: Elevators/escalators saw H1 revenue of Rmb960/410m (+11%/2% YoY) and grossmargin of 41.8%/35.8% (+2/6ppt YoY), helped by lower raw material costs/higherpercentage of higher-margin railway and rail transit projects. Installation/maintenancerevenue was Rmb140m (+35% YoY), and gross margin went up 3ppts to 25% ondilution of fixed expenses. As of end-H1, Canny had Rmb4.31bn of orders on hand.Operating cash flow jumped 514% YoY to Rmb190m thanks to an increase in notespayable. Canny plans to distribute a cash dividend of Rmb0.2/share.

Q: Has the company's outlook/guidance changed

A: With the rising number of elevators in China and demand for replacement, Cannymaintains an optimistic attitude towards elevator sales and maintenance.

Q: How would we expect investors to react

A: We expect a positive response from investors.

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