1H performance in 2018 was lower than expected
Founder Motor announced 2018 1H results: operating income 595 million, + 9.52% YoY; net profit attributable to the parent company 44 million,-21.77%YoY, corresponding to 0.10 yuan per share; 2Q18 realized revenue of 270 million,-7.7% YoY; and net profit attributed to the parent company, 26 million,-26.18%YoY. 1H net profit growth retracted sharply, and the performance was lower than expected.
Trend of development
Among the main businesses, revenue from sewing machines / cars / controllers increased or decreased-7.31% Universe 1.6% Universe 39.59%. Among them, the controller business revenue accounted for 31.3% in the reporting period, an increase of 6.7ppt over the same period last year, becoming the largest growth point. However, due to the controller business gross margin of only 13.84%, the overlay sewing machine and automobile business gross profit margin also fell by-5.99% and the gross profit margin of the company fell by 2.22%, and the comprehensive gross profit margin of the enterprise fell 3.4ppt to 19.6% compared with the same period last year.
In the automobile business, due to factors such as the rise in natural gas prices and the decline in the prosperity of natural gas heavy trucks, the revenue and net profit of sea energy decreased by-40% and 42% compared with the same period last year. DeVos and the original Zhengfang motor business benefited from the supporting star models such as Baojun E100 and Geely Dihao EV, with revenues plus 44%/+30%YoY respectively, but the decline of subsidies for new energy vehicles caused the profitability of the automotive drive motor industry to be generally under pressure, increasing income without increasing profits, and DeVos disclosed a loss of 1.47 million yuan in operating profit.
Looking ahead, heavy trucks have entered the off-season and the macro-economy has weakened in July, sales have declined as scheduled, subsidies in the short and medium term of the new energy policy have further declined, and the businesses of sea energy and new energy motors will continue to be under pressure. affecting the overall development of the company's automotive business; the sewing machinery industry is expected to continue to shrink and the pace of production slows, so sewing machine business revenue is expected to continue to tighten. The company actively adjusts the customer and product structure during the performance period, and the intelligent controller business is expected to become the biggest bright spot of the company throughout the year.
Profit forecast
As the previous major profit point of the company, the sea energy business may usher in a substantial correction for the whole year, superimposing the overall profitability of the new energy vehicle motor industry is under pressure. we will lower the 2018 Unix 19e earnings forecast by 13.0% shock 24.7% to 0.26 pm 0.28 yuan from 0.3 pm 0.37 yuan.
Valuation and suggestion
The company's current share price corresponds to 22.3 times 18max, 24.1 in 1919. Maintain the neutral rating and lower the target price by 27% to 8.0 yuan in response to the profit forecast adjustment, corresponding to the 18-pound 30.8-pound 28.6 times Pmax E in 19, which has 29.2% room compared with the current stock price.
Risk.
The downside risk caused by the rapid rise in raw material prices.