Q3 single-quarter profit changed from negative to positive, and the financial expense rate dropped sharply compared with the same period last year.
Driven by the increase in the company's net investment income from-79 million yuan in the same period last year to 56 million yuan this year, the company Q3 achieved a net profit of 7.94 million yuan in the parent stock in a single quarter, far better than the loss of 130 million yuan in the same period last year. It is expected that the increase in investment income is mainly due to the improvement in profits of Dongfeng Yueda Kia.
In addition, benefiting from the decline in financing costs caused by the repayment of bank loans, the company's Q3 single-quarter financial expense rate continued the previous trend, falling from 10.34% to 7.46%, reducing expenditure by nearly 20 million yuan.
Sales improved significantly, but Dongfeng Yueda Kia profit repair did not meet expectations.
Dongfeng Yueda Kia, the company's main source of profit, has seen an improvement in sales this year compared with last year, with monthly sales growth of more than 20% since June. From January to September, Dongfeng Yueda Kia sold a total of 423600 cars, an increase of 5.2 per cent over the same period last year, of which the profitable SUV sold more than 140000 vehicles, a cumulative growth rate of more than 60 per cent. Although the sales figures are eye-catching, from the profit side, the overall performance is lower than we had expected. Although Q3 improved sharply in a single quarter compared with the same period last year, from January to September, the company achieved a net investment income of 270 million, a decrease of 20% compared with the same period last year, and a decrease of 70% compared with the level of 900 million yuan in 11-13 years. The sharp decline in investment income shows that Dongfeng Yueda Kia's profitability has not improved significantly. It is expected to continue to boost profitability through measures such as adjusting the sales structure and reducing costs, and the follow-up effect remains to be seen.
Maintain the recommended rating.
Considering that Dongfeng Yueda Kia's earnings repair was not as expected, we lowered the company's 16-18-year EPS to 0.271, 0.35,0.43 yuan, with a price-to-earnings ratio of 33 times, 25 times and 20 times respectively, maintaining the "recommended" rating.
Risk hint: Dongfeng Yueda Kia's profits fell short of expectations; other business profits deteriorated significantly.