Performance summary: according to the semi-annual report of 2019, the company realized revenue of 1.6 billion yuan in the first half of 2019, down 8.5% from the same period last year, realized net profit of 90 million yuan, up 46% from the same period last year, and deducted 80 million yuan from non-home net profit, an increase of 37% over the same period last year.
The performance is in line with expectations, and the investment income contributes greatly. In the first half of the year, the company's revenue showed negative growth due to the downturn in domestic automobile production and sales. The post-market business remained robust, with revenue of 110 million yuan in the first half of the year. The gross profit margin was 15.9%, an increase of about 1 percentage point over the same period last year. The expense rate during the period was 12.8%, an increase of 2.2% over the same period last year, of which the sales expense rate, management expense rate and financial expense rate were 4.1%, 8.0% and 0.7% respectively, with year-on-year changes of + 0.6%, + 1.3% and + 0.3%, respectively. The sharp increase in the rate of management expenses is mainly due to the increase in investment in the research and development of low-carbon green products. The investment income increased by about 50 million yuan over last year, mainly due to the increase in the investment income of the Shanghai Shangyi Fund, an associate.
The main business is developed steadily, with equal emphasis on endogenesis and extension. The main business of the company implements the idea of "factory base", and the subsidiary Qingdao Delian and Foshan Delian Phase II continue to step up the construction of production line and warehousing equipment. During the reporting period, the company successively invested in Fukuda Information, a dangerous waste recycling company in the automotive market, and Shanghai Taihao Technology, a supporting company for tire pressure monitoring system in the automobile preloading market, opened the road of horizontal layout and integration, and had a sound investment style. it is highly consistent with the main business and strategic direction. Among them, the company relies on the information platform established by Benedict information, establishes extensive cooperative relations with terminal 4S stores and auto repair shops, obtains a large number of data and information of recovery links, establishes an accurate goods circulation database, and realizes the complementarity of technology and resources. thus give full play to the synergy of automobile aftermarket, save comprehensive distribution costs, and improve product sales profit margins.
Profit forecast and investment advice. Semi-annual report results exceeded expectations, the company is an excellent enterprise in the field of automotive fine chemicals, at the same time, mergers and acquisitions actively expand the market business, business coordination to ensure follow-up development. The return net profit of the company from 2019 to 2021 will be raised to 2.40.27 billion yuan, corresponding to 0.280.31 billion yuan in EPS, and the compound growth rate of performance in the next three years will be 22%. We give 2019 22 times PE, corresponding to 1 PEG, the target price of 6.16 yuan, upgraded to the "buy" rating.
Risk tips: post-market business development is not as expected; upstream raw material prices have increased significantly; new energy vehicle customer development is not as expected and other risks.
