Event
On January 16, 2020, the company issued a performance forecast. It is estimated that the net profit attributed to shareholders of listed companies in 2019 is about 212.7849 million yuan, an increase of about 124.437 million yuan, or about 140.85%, compared with the same period last year. Net profit after deducting non-recurring gains and losses was about 177.1216 million yuan, an increase of about 74.52 per cent compared with the same period last year.
Main points of investment
The main reason for the performance exceeding expectations
The company's 2019 performance exceeded our net profit forecast of 178 million in the company's in-depth report, and we expect the company's significant product structure adjustment effect to be the main reason. In 2018, the company adjusted its product structure and sales strategy, abandoned the customer business with lower prices, and vigorously developed middle and high-end products with high prices and high gross profit margins. After a year of adjustment, the company's revenue and profit margins gradually recovered, especially in the fourth quarter. At the same time, the decline in raw material prices and the devaluation of the RMB have contributed to the growth of the company's performance.
The steady growth of global car ownership provides a guarantee for the sustainable development of the company's performance in the next five years. Global car ownership is expected to grow at an average annual rate of about 3.7%, while China's car ownership will grow by as high as 6.8%. The growing industry scale provides a good external environment for the adjustment of the company's product structure, and the average unit price and gross profit margin of the company's products are expected to further increase in the next two years. At the same time, the company has a strong product quality advantage and brand influence, and the market share is expected to increase gradually.
Automobile and Rail Transit OEM Product Business Development Co., Ltd., after supplying Sinotruk since 2015, it has been fully recognized by customers and certified by Daimler in 2018, achieving a breakthrough for foreign brand customers. The company is expected to become a supplier to more mainframe factory customers and rapidly expand the scale of OEM business. The company has passed the certification of EMU braking products and is expected to enter the relevant fields of the rail transit industry and further expand the development space of the company.
Profit forecast and valuation
It is estimated that the company's earnings per share from 2019 to 2021 will be 0.98 pounds 1.16 yuan 1.39 yuan, an increase of 140.38% 17.8% and 19.6% over the same period last year. The company has a certain brand advantage in the sub-industry, and has a strong competitiveness in the export market. Considering the company's competitiveness and industry status, the company is given a "holding" rating.