Hongfa (600885) 2019 Interim Report Review: Home appliances and cars drag down performance, power and new energy boom
Core Views Leading domestic relays, multi-category expansion across regions, power relays are expected to exceed expectations in 2019, new energy automotive relays, and low-voltage electrical appliances open up medium-to-long-term growth space, both offensive and defensive, maintaining a “Buy” rating.
The growth in the first half of the year was slightly lower than market expectations.
The company achieved in the first half of 2019: revenue 34.
07 trillion, +1 a year.
53%; net profit attributable to mother 3.
55 ppm, at least -3.
42%; net profit deducted from non-return to mother 3.
34 ‰, at least -2.
The company’s overall revenue and net profit in the first half of the year were slightly lower than market expectations. First, home appliances and traditional automotive relays faced pressure from price competition and weak demand.
Single quarter of Q2 2019: revenue of 17.
8.2 billion, +9.
65%; net profit attributable to mother 1.
9.7 billion, +25.
24%; net profit of non-attributed mothers1.
8.4 billion, +22.
Q2 has improved significantly from the previous month. Smart meter relays, new energy vehicle relays, and low-voltage electrical appliances have grown rapidly, becoming the company’s long-term development foundation.
The gross profit margin remained at a high level, and the expense ratio increased slightly.
The company’s consolidated gross profit margin for the first half of 2019 was 38.
27%, an increase of 0 every year.
17 PCT, an increase of 1 from the second half of 2018.
53 PCT, mainly benefited from industrial control with high gross profit margin, the proportion of sales of HVDC products increased.
In the first half of 2019, the sales expense ratio and management expense ratio (including R & D) were 5 respectively.
98%, increasing by 0 each year.
35 PCTs, 0.
42 夜来香体验网 PCT, new product development and sales promotion led to a slight increase in the expense ratio.
The company’s operating cash flow has maintained a large net inflow since the second half of 2018, and the amount of operating cash flow in the first half of 2019 was 8.
High-voltage direct-current and low-voltage electrical appliances continued to grow rapidly, and the meter replacement was started.
While traditional businesses are under pressure, innovative businesses still perform well: 1) Power relays: The power relays have been adjusted for nearly two years, and the second round of state-of-the-art smart meter replacement has been launched.The share has further increased, and the sustainable growth in the first half of the year23.
2) High-voltage DC: The company’s domestic market share is close to 40%, and it has become a benchmark customer supplier for Land Rover, Porsche, Volkswagen MEB, and Tesla overseas, which has extended its growth by 55% in the first half.
3) Low-voltage electrical appliances: Breaking through core customers in North America and Europe, sustainable large orders helped high revenue growth, and expanded growth in the first half of the year.
In addition, the company was in industrial control in the first half of the year, and there were 23 signal relay relays.
Due to the fierce competition in the home appliance industry, the company declined by 7 in the first half of 2019.
29%; the demand for traditional cars fell, and the company interrupted 25% in the first half of 2019.
The macro economy continues to decline; exchange rate risks; downstream household appliance demand substitution.
Profit forecast and estimation.
The company has been deeply involved in the relay industry for many years, devoted to the strategy of seven little giants to build a global relay leader, and at the same time, it has a proactive layout of the flooded component field and has long-term development momentum.
Considering the downturn in the home appliance and traditional automotive industries, lowering the company in 2019?
Net profit forecast for 2021 is 7.
6.8 billion yuan (previous forecast 8.
510,000 yuan, change -8.
2%), corresponding to EPS1.
43 yuan / share (original EPS forecast 1).
55 yuan), currently corresponding to 24/20 / 17xPE.
Taking into account the company’s global relay industry leader level, maintain a target price of 29.
38 yuan and “Buy” rating.