Event: on September 12, Jingu shares | Auto Superman held a press conference on "2019 Digital New Power" in Beijing.
Domestic steel wheel and EPS equipment leader, join hands with BABA to create a new retail rich after the car. 1) the steel wheel plate of the company has grown into a mature business after more than 20 years of operation, becoming the first in China and the top three in the world, and the patent "Avatar" has been in the leading industry for three years. EPS environmental protection equipment is authorized by the global exclusive technology, and the demand is increased under the national green environmental protection policy. 2) the stability of the company's ownership structure ensures strategic determination. In August 2018, Ali, Jingu and Kangzhong joined forces to reap the top flow and auto parts supply chain, and enter the new retail after automobile in an all-round way. Business restructuring in 2019 led to short-term pressure on performance and stable profitability of automotive wheels and EPS businesses. However, the cash flow of 2019Q2 is improving rapidly, and the automotive aftermarket business is expected to enter the harvest period.
The growth of the age of cars has spawned a trillions of post-car market, and the leaders of chain brands will accelerate their expansion. 1) by the end of June 2019, the number of cars in China has reached 250 million, and the scale of car sales has increased nearly fourfold in the past decade. The average age of cars in China is only 4.9 years, and the number of vehicles with a retention period of more than five years has increased by 8% compared with 2010. With the growth of car age, the demand for post-automobile service is increasing day by day, the scale of China's automobile aftermarket has reached 1.3 trillion yuan in 2018, an increase of 20.56% over last year. 2) in the American post-automobile service market, the market share of independent market service stores has exceeded that of 4S stores. There are many pain points in the operation of traditional 4S stores in the domestic market, and chain brand stores are expected to expand rapidly under the outbreak of demand and technology. With reference to the market experience in Europe and the United States, the domestic auto chain leader is expected to accelerate expansion through merger and integration.
BABA Department of traffic superimposed advantages of SaaS stores, Superman brand is expected to gradually win. 1) the core advantage of the company lies in: BABA's ecology and flow, Xinkang public supply chain resources, combined with car Superman offline store service capabilities, the three to achieve high coordination. 2) the era of mobile Internet has fully penetrated and cultivated a large group of O2O consumers, and the penetration of online consumption has been deepened. Now the automobile after-service market has entered the 4.0 era, pay more attention to the building of offline service capacity, car Superman offline store advantage is highlighted. 3) the industry has entered a period of fine operation, compared with the main competitors in the industry, such as Tuhu car maintenance, car enjoyment, etc., Superman brand is expected to enjoy the winner harvest period.
Maintain the "overweight" rating. According to the key assumptions and the 2019 semi-annual report, the company's operating income from 2019 to 2021 is expected to be 2.548 billion, 3.798 billion and 4.866 billion, respectively, and the homed net profit is 151 million, 253 million and 367 million, respectively. Maintain the "overweight" rating.
Risk tips: store expansion is not up to expectations; profitability is not up to expectations; affected by cyclical fluctuations in the downstream industry.