[investment points]
According to the 2018 mid-term report released by Del shares, the company achieved operating income of 1.842 billion yuan, an increase of 131.10% over the same period last year, a net profit of 99 million yuan, an increase of 55.95%, and a non-return net profit of 97 million yuan, an increase of 66.44% over the same period last year.
CCI's post-balance-sheet results increased sharply compared with the same period last year, while revenue from traditional businesses declined. The company's 2018H1 achieved revenue of 1.842 billion yuan, a year-on-year increase of 131.10%. There are two main reasons: one is that the company merged with CCI from May 2017, which included only two months' financial data of CCI in the same period last year, and the other is that the company's new product EHPS and gearbox pumps have been gradually mass-produced since the second half of 2017. The main reason why the growth rate of net profit is lower than the growth rate of revenue lies in the increase of three fees, especially the substantial increase in R & D investment in management expenses, which may further increase management costs in the future. The company's traditional business hydraulic steering pump H1 revenue decreased 11.69% in 2018 compared with the same period last year. At present, the HPS product structure has gradually changed from passenger vehicles to commercial vehicles, accounting for about 14% of the business. Even if there is a further decline in the traditional business in the future, it will have little impact on the company's overall performance.
With the simultaneous development of endogenous growth and epitaxial mergers and acquisitions, the product line is constantly enriched. The company has developed from a single mechanical and hydraulic HPS products to three categories of products, nine product series, a total of more than 60 kinds of products, successfully transformed into a system supplier of auto parts. At present, the company's main products include pump and electric pump products, motor, electric control and automotive electronic products, noise reduction (NVH) thermal insulation and lightweight products, of which the NVH business of the acquired CCI company has reached 72.53%, which has become the company's largest business, and the future performance is expected to improve steadily. The company's EHPS, automatic transmission oil pump and EPS motor and other products have high technical barriers, the future of a number of new products will continue to thicken the company's performance.
The inflection point of the company's performance has appeared, and the issuance of convertible bonds helps the company to take off. The company has successfully issued 565 million yuan of convertible bonds in July 2018, and the raised funds will be used for the construction of the electric hydraulic pump and automatic transmission oil pump project. after the project is put into production, it is expected to contribute 66 million yuan to the company's net profit every year. At present, the company has basically completed the integration of CCI, EHPS, EPS motors and electronic control products and other new products gradually mass production and began to support customers. We believe that the inflection point of the company's performance has emerged, and the future development of the company is worth looking forward to.
[investment advice]
It is estimated that the annual operating income of the company in 18-19-20 is RMB 3.750,000,000 respectively, the net profit of the parent company is RMB 2.47000,000, the EPS is RMB 3.34max, the corresponding PE is 14-10-8, and the company is given the rating of "overweight" for the first time.
[risk Tip]
The integration of CCI is not as good as expected.
The development of the new business is not as expected.