Zhuzhou Times New Material Technology:Interim results in line;BOGE integration progressing smoothly发布时间：2016-08-22 研究机构：瑞银证券
Q: How did the results compare vs. expectations?
A: The company reported H116net profit attributable to the parent of Rmb182m (-11.74% YoY), better than we expected, as the figure is equivalent to 92% of ourRmb198m estimate for the full year. However, excluding Rmb82m of governmentsubsidies (37% of net profit) the company received in H1, net profit fell 44.66% YoY toRmb114m. Overall, interim results were in line with our expectations.
Q: What were the most noteworthy areas in the results?
A: Revenue rose 6.59% YoY to Rmb5.924bn in H1due to growth in rail transit andauto market revenue. Gross margin expanded 2ppts to 17.22%, mainly becausesubsidiary BOGE's gross margin went up. Financial expenses stood at Rmb90m due toFX losses on euro-denominated loans. Meanwhile, operating cash flow was Rmb168m(H115: -Rmb114m).
Q: Has the company's outlook/guidance changed?
A: Realized profit was better than expected, as integration of BOGE was smooth. Thecompany looks to improve profitability, with a revenue target of Rmb11.6bn for 2016.
Q: How would we expect investors to react?
A: We expect a neutral response from investors.