[event] the company released its semi-annual report on the evening of August 29.
[opinion]
1) the performance is growing steadily and the growth rate of new business is bright. ① 's revenue in the first half of the year was 749 million yuan, + 13.86% compared with the same period last year, and its net profit was 80.54 million yuan, + 7.71% compared with the same period last year. From the perspective of ② sub-business, the income of commutator and collector ring is 535 million yuan, + 11.50% compared with the same period last year; the income of automobile electronically controlled components and lightweight parts is 37.69 million yuan, + 89.43% compared with the same period last year; and the income of multilayer insulation wire is 36.91 million yuan, + 37.51% compared with the same period last year. The growth rate of new business is remarkable. ③ gross profit margin was 27.59%, down 1.78ppt from the same period last year; net profit margin was 10.75%, slightly lower 0.61ppt than the same period last year. ④ expenses were well controlled, and the expense rate decreased from 0.31ppt to 15.15% compared with the same period last year, of which the sales expense rate was from-0.09ppt to 3.06%, the management expense rate was from-0.29ppt to 11.10%, and the financial expense rate was from + 0.07ppt to 0.99% year-on-year.
2) the leading position of commutator industry is stable, and the development of new business is advancing steadily. ① is the commutator leader and the second largest market share in the world. Its core customers include Bosch, Dechang Motor, Valeo, Dian, Denso and other global giants. Commutator business is expected to maintain sustained and steady growth. Aiming at the field of new energy vehicles, ② is actively expanding the business of precision components related to "Sandian". Drive motor connector products have been fixed by Zaifu and will be mass produced in the short term; power battery pack components have won Daimler's long-term supply contract and are expected to become the company's new performance growth pole. ③ will be out of supply in China's new energy vehicle market from 2020, and foreign car giants are laying out China's new energy vehicle market in the post-subsidy era one after another. The company has participated in the strategic layout of new energy vehicles for foreign customers such as Daimler, and is expected to benefit deeply from the global development trend of new energy vehicles, and the new business is expected to gradually achieve volume.
3) Investment suggestions: without considering the impact of SMK consolidation, the company's income in 2018-20 is expected to be 1.616 billion yuan, 2.019 billion yuan and 2.701 billion yuan respectively, the net profit of returning to the mother is 171 million yuan, 227 million yuan and 325 million yuan respectively, the EPS is 0.59,0.78 yuan and 1.12 yuan respectively, and the corresponding PE is 19.79,14.91,10.41 times respectively.
Risk hint: the progress of new business development is low, the development of new energy vehicle industry is low, and the progress of capacity expansion is low.