Main points of investment
The company released the 2019 mid-term report: in the first half of 2019, the company achieved operating income of 196 million yuan, an increase of 20.55% over the same period last year, and its net profit was 59 million yuan, an increase of 3.66% over the same period last year. The weighted average rate of return on net assets was 3.99%, down 3.35 percentage points from the same period last year.
Airborne suspension / launchers remain the company's main source of revenue. From a business point of view, the operating income of airborne suspension / launchers reached 187 million yuan, an increase of 48.87 yuan over the same period last year, accounting for 95.59% of revenue, an increase of 18.18% over the same period last year.
The gross profit margin of the company's main business was 75.33%, an increase of 3.5% over the same period last year, of which the gross profit margin of the main airborne suspension / launcher was 75.30%, down 7.46% from the same period last year, but still at a high profit level.
The cost during the period of the company was 40.7454 million yuan, an increase of 31.22% over the same period last year, accounting for 20.79% of the operating income, an increase of 1.62% over the same period last year. Among them, the increase in management expenses is mainly due to the increase in the cost of the board of directors fund and the establishment of holding subsidiaries.
The increase in the company's R & D investment is mainly due to the company's strengthening of basic research investment, which will help the company to maintain its technological leadership in the field of high-precision mechanical transmission and digital servo drive and enhance the company's core competitiveness.
The company's credit impairment loss of 21.5803 million yuan has a greater negative impact on the company's profit end, mainly due to the increase in bad debt losses. if the impact of asset impairment loss is added back, the company's net profit growth rate is 41.37%.
During the reporting period, Xinxing equipment intends to acquire a 100% stake in Beijing AVIC Shuangxing Technology Co., Ltd., this transaction constitutes a related party transaction, and the transaction is still in the negotiation stage. This transaction is fully in line with the company's business development strategy, and is conducive to enrich the company's R & D strength with the help of AVIC Shuangxing's R & D team, and further enhance the core competitiveness of the enterprise.
In 2019-2021, we expect the company to achieve a net profit of $1.70 million and $1.67 million, respectively, corresponding to the closing price of PE on August 7, which is double that of 33-29-25, maintaining a "prudent overweight" rating.
Risk hint: the equipment loading structure changes, the main business income declines, and the new product loading progress is not as expected.
