The company's revenue increased by 0.38% in 2018, and its net profit decreased by 668.68% due to large goodwill impairment, and the performance was in line with expectations. Adjust the forecast of EPS from 2019 to 2021 to 0.10, 0.11, and 0.12 yuan, corresponding to PE, which is 60-57-51. Considering the growth brought by the company's first-mover layout in the fuel cell industry, the target price is given 6.75 yuan (corresponding to 68 times PE in 2019), maintaining the "overweight" rating.
The annual report is in line with expectations and is free to travel light. In 2018, the company's operating income was 8.638 billion yuan (year-on-year + 0.38%, the same below), and the net profit was-21 million yuan (- 668.68%), of which the company set aside a large amount of goodwill impairment totaling 24 million yuan in 2018. The corresponding EPS was-1.00 yuan, and the performance was in line with expectations. Gross / net interest rate 17.95% Maxime 27.50% (- 2.33/-32.35pcts), affected by the Sino-US trade dispute, the company's motor raw material prices rose, resulting in a decline in profits During the period, the expense rate is 12.81% (- 1.04pcts), of which the sales / management / financial expense rate is 4.68%, 6.99% and 1.14% (+ 0.52/-1.81/+0.25pcts), and the R & D investment accounts for 4.74% (+ 0.17pcts) of revenue in management expenses.
Home appliance motor business to improve quality and reduce cost, new energy vehicle powertrain business growth is expected. The company's home appliance motor business accounts for 53.91% of revenue in 2018, which is currently the largest business. During the reporting period, the company actively promoted the construction of factories in Vietnam, and is expected to release production capacity in 2019 and enter the cycle of quality improvement and cost reduction. At the same time, after 2019, the macroeconomic recovery, home appliance sales are expected to improve, home appliance motor business is expected to rise steadily. The company's new energy vehicle powertrain business accounted for 16.29% of revenue in 2018, affected by subsidized decline compared with the same period last year-0.2pcts. In 2018, the company shipped 147000 motors for new energy vehicles, ranking second in the country's total shipments, supporting many car companies, such as BAIC, Chery, Yundu and ZTO Express bus, with high customer resources; benefiting from the continued high prosperity of new energy vehicles, it is expected that the new energy vehicle powertrain business is expected to become the company's new growth pole.
Plus the layout of fuel cells, Xu Li upgrade and transformation. The company started from the home appliance motor industry, to the new energy vehicle industry, and then to the hydrogen fuel cell industry, successfully entered the trillion-level market and realized the transformation and upgrading of the industry. In 2016, the company became the second largest shareholder of global fuel cell leader Ballard, with 9.9% shares, successfully cut into the fuel cell industry and obtained fuel cell production qualification. In 2018, the company shipped 600 sets of fuel cell systems. January 2018 announced investment in global hydrogen storage technology leader HT, the core link of the hydrogen energy industry chain. In April 2019, it was announced that it planned to acquire Shanghai Remodeling, a leading domestic fuel cell company, and intensively increase the layout of fuel cells. Fuel cell industrialization accelerated significantly in 2019, and the company hopes to occupy the market opportunity by relying on first-mover advantage and strong layout.
Risk factors: sales of new energy vehicles fall short of expectations and fuel cell industrialization falls short of expectations.
Investment suggestion: considering the pressure on the profits of the company's new energy vehicle powertrain business after the subsidy retreat, we downgrade the EPS forecast for 2019-2021 to 0.10 EPS 0.11 EPS 0.12 yuan (the original 2019 Universe 2020 EPS is 0.14 pm 0.17 yuan), corresponding to the PE times as much as 60-57-51, considering the growth brought by the company's first-mover layout in the fuel cell industry, giving the target price 6.75 yuan (corresponding to 68 times PE in 2019). Maintain the "overweight" rating.