Events:
Del shares released the 2018 mid-term report: the company achieved operating income of 1.842 billion yuan in the first half of 2018, + 131.1% compared with the same period last year, and the net profit attributed to the shareholders of the listed company was 99 million yuan, + 56.0% compared with the same period last year. + 66.4% year-on-year Among them, the operating income in the second quarter was 1.004 billion yuan, + 62.6% compared with the same period last year, and the net profit attributed to shareholders of listed companies was 53 million yuan, + 60.1%, and 53 million yuan, + 89.1%, respectively.
Main points of investment:
The performance was in line with expectations, and the operating income of the new products gradually reached 1.842 billion yuan in the first half of the year, an increase of 131.1% over the same period last year. The net profit of shareholders belonging to listed companies was 99 million yuan, an increase of 56.0% over the same period last year. If the impact of the consolidated table is excluded, the original main business income increased by 38% over the same period last year. The company's new products, electro-hydraulic steering pumps and gearbox pumps, began to release gradually in the second half of last year, and the release of orders further accelerated in the second quarter of this year, leading to a 20% increase in revenue in a single quarter compared with the previous quarter. During the reporting period, the income of the gearbox oil pump was 41 million yuan, an increase of 230% over the same period last year, slightly lower than expected, while the revenue of the electro-hydraulic pump was 125 million yuan, an increase of 55 times over the same period last year, in line with expectations. The revenue of the old hydraulic steering pump fell 11.7%, which was better than expected, while that of CCI was 1.34 billion yuan, better than expected. Looking forward to the annual performance, as the downstream supporting customers gradually climb the slope of new models, the annual performance will continue to improve.
Single business gross profit margin is good during the reporting period, the company's gross profit margin during the reporting period is 29.7%, year-on-year-2.33pctmenQ2 single-quarter gross profit margin 28.7%, year-on-year-1.2pct, month-on-month decline 2.2pct. The total expense rate of the three items is 21.95%, which is + 0.82pct compared with the same period last year. The year-on-year decline in gross profit margin was mainly due to the fact that CCI, a low-margin business, only merged for two months in the same period last year, and all were incorporated in the first half of this year, so the company's overall gross profit margin was lower. From a product point of view, gross profit margin of hydraulic steering pump increased 5.1pctCCI gross margin compared with the same period last year, 1.3pct increased, gearbox oil pump increased 12.2pct, and gross profit margin returned to a reasonable range of 41% after the volume of electro-hydraulic pump.
Convertible bonds have been listed, the financial expense pressure in the second half of the year will improve the expense side, the overall expense rate increased slightly during the reporting period, of which the sales expense rate decreased by 0.26% compared with the same period last year; the management expense rate increased by 0.22% year-on-year, mainly due to the increase in R & D expenditure; the financial expense rate increased by 0.86% year-on-year, and the previous debt financing acquisition of CCI led to an increase in interest expenditure during the reporting period. The company's convertible bonds were listed on August 14, 2018, raising a total of 565 million yuan, and the funds raised have been put in place. first, it can significantly improve the financial expense pressure of the company in the second half of the year; second, the corresponding production line has been put into construction. the expansion of production capacity ensures the release of new products of the company. In the long run, the growth channel will be established and wait for the company to grow.
Profit forecast and investment rating: maintain the buy rating. It is estimated that the company's EPS in 2018, 2019, and 2020 will be 2.45, 3.30, 4.19 yuan, and the corresponding share price PE will be 14-11-8, respectively, maintaining the buy rating.
Risk hints: the risk that the expansion of new products is less than expected; the risk that sales in the automobile market fall short of expectations; the risk that the performance of the acquisition target is not as expected; and the risk that the construction of fund-raising projects is not as expected.