GAC Group (601238) Interim Report Review: Independent Sales Pressure Interim Report Performance Meets Expectations
The independent sales volume is large, and the interim report performance is lower than expected. The company released the 2019 semi-annual report on August 31, and the company achieved revenue of 281 in 2019H1.
23 ‰, at least -23.
38%; net profit attributable to mother is approximately 49.
19 ppm, ten years -28.
85%; net profit after deducting non-attribution is about 32.
670,000 yuan, at least -50.
77%; 19Q2 revenue was 139.
770,000 yuan, at least -21.
24%; net profit attributable to mother 21.
41 trillion, ten years -29.
42%; we think the company is dragged down by the increase in sales of independent brands, and the company’s performance in the first half of the year is in line with our expectations.
Looking forward to 2020-21, we believe that the company will continue to benefit from the strong sales performance of Japanese joint venture models. It is expected that the company’s net profit attributable to its mothers in 2019-21 will be 99.
55 trillion, EPS is 0.
22 yuan, maintaining the “overweight” level.
The lack of independent performance has led to a reduction in gross profit margin. We look forward to the remodeling and the launch of new models. The total gross profit margin of the company in 2019H1 is 9.
1% for a year -13.
19pct; of which the gross profit margin of the independent brand is 2.
82% a year -16.
44%, we believe that the promotion of independent brands has increased, and sales have increased.
We believe that the sales volume of the conversion company has changed to GS4, remodeled GS8, new GA6 and new energy model Aion S. The company’s gross profit margin is expected to gradually rise.
In terms of expense ratio, the overall expenses of the company in 19H1 were 13.
53%, ten years +0.
23pct; of which selling expenses are 6.
12% a year -1.
68%, mainly due to factors such as the decrease in after-sale expenses with sales; administrative expense ratio (including R & D) is 7.
2%, ten years +1.
64pct, mainly due to the increase in research and development expenditure; financial expenses 0.
21%, ten years +0.
27pct, mainly due to the increase in borrowings and the decrease in interest income.
The joint venture Guangfeng Guangben performed strongly. The sales volume of Guangfick and Guang Mitsubishi changed in 2019H1, and the company realized investment income of approximately 49.
600 million, at least -3.
Against the background of the decline in industry sales, the company’s investment income declined slightly, and we believe it is mainly due to the strong sales performance of Guangben Guangfeng.
According to data from the China Automobile Association and the company’s announcement, the domestic passenger car sales growth rate in 2019H1 is -14%, and the joint venture Guangfeng achieved sales of 31.
120,000 vehicles, +21 in the past.
86%; Guangben achieved 39 sales.
450,000 vehicles, +16 per year.
41%; Guangfei Ke achieved sales 3.
580,000 vehicles -48 per year.
99%; Guang Mitsubishi achieved sales of 6.
310,000 vehicles, at least -16.
We believe that through the introduction of Guangfeng and Guangben’s subsequent benchmark RAV4 and C-RV sister models, sales of Guangfeng and Guangben will continue to maintain a good momentum of growth; Guangfick and Guangmitsubishi are affected by air traffic interference.Short-term sales are unlikely to improve significantly.
Benefiting from the strong performance of Japanese joint venture car companies, maintaining “overweight” rating According to data from the China Automobile Association, Japanese cars accounted for 21% of domestic passenger car sales in the first six months of 2019.
5%, +3 per night.
7pct, the market share of Japanese models has grown significantly. We expect the strong market performance of Japanese models to continue. We maintain the company’s 2019-21 profit forecast and expect to achieve net profit attributable to mothers of 99, respectively.
55 ppm, corresponding EPS is 0.
The average PE of comparable companies in the industry in 2019 is estimated to be about 12.
5X, considering that the company will continue to benefit from the strong sales performance of Japanese joint venture car companies, giving the company a 14-15X PE estimate for 2019 with a target price of 13.
55 yuan remained unchanged, maintaining the “overweight” rating.
Risk warning: Passenger car market sales are less than expected; the company’s new product launch progress and sales are less than expected; the company’s new energy business development is less than expected; capacity expansion progress is less than expected.