Events:
On February 25, the company announced its results KuaiBao: revenue in 2019 was 2.979 billion yuan, up 13.23% over the same period last year; net profit from home was 304 million yuan, up 16.66% from the same period last year; revenue from Q4 in 2019 was 1.027 billion yuan, up 54.62% from the same period last year; net profit from home was 85 million yuan, up 39.04% from the same period last year.
Comments:
1) the growth of the business of drones and spare parts has accelerated, and the performance has improved significantly quarter by quarter.
The company's revenue in 2019 was 2.979 billion yuan, an increase of 13.23% over the same period last year, exceeding market expectations; operating profit was 388 million yuan, up 18.20% over the same period last year; and net profit was 304 million yuan, an increase of 16.66% over the same period last year. The growth rate of operating profit and net profit exceeded the growth rate of revenue, representing the improvement of the company's profitability. In the fourth quarter, Q4 had revenue of 1.027 billion yuan (up 54.62% over the same period last year, up 40.46% from the previous quarter), operating profit of 107 million yuan (up 42.71% from the same period last year, up 0.50% from the previous quarter), and net profit of 85 million yuan (up 39.04% from the same period last year. 0.31%), compared with the three quarters, the company's Q4 revenue growth rate turned positive and increased significantly in a single quarter. Revenue and profit growth far exceeded market expectations, improving significantly quarter by quarter. The main reasons for the increase in operating income and operating profit compared with the same period last year are: the company's drone business developed smoothly, large orders were signed during the reporting period, and the scale grew steadily; the elevator market gradually changed from incremental drive to incremental and stock drive. the acceleration of elevator iteration in the old district has led to the accelerated growth of the company's elevator motor parts business; at the same time, the company continued to strengthen internal management, reducing costs and increasing efficiency during the reporting period.
From the balance sheet, the company's total assets at the end of the year were 4.228 billion yuan, an increase of 22.89% over the same period last year; and the parent owner's equity was 2.438 billion yuan, an increase of 12.75% over the same period last year. The sharp increase in the company's total assets and owners' equity is due to the construction of the company's intelligent factory project, which reflects that the company is constantly promoting the re-construction of production capacity, which is expected to greatly improve the existing efficiency and the capacity space of the new energy vehicle business in the future.
2) the iterative acceleration of elevators in the old community has led to the accelerated growth of the business of elevator motor parts in the company.
The elevator market has gradually changed from incremental drive to incremental and stock drive, and the iterative acceleration of elevators in the old residential area has led to the accelerated growth of the company's elevator motor parts business in 2019 and led to the improvement of the overall performance. The company's auto parts business is affected by the continued decline in overall auto sales (according to the China Automobile Association, China's auto sales in 2019 were 25.769 million, down 8.2% from the same period last year, of which 21.107 million were passenger cars, down 9.2% from the same period last year). Basically at the bottom of the industry, there are marginal improvements in the recovery and layout of the auto industry, such as new energy flat line motors and steel prices. In addition, the technology of flat wire motor driven by new energy can be paid more attention to in China.
3) the company's UAV business further develops the military market and overseas market, while making efforts to speed up the layout of large-scale logistics drones.
The company is the first UAV development unit in China, with profound technology accumulation, products listed in the military for more than ten years, and related achievements have won the national first prize for scientific and technological progress. With the increasing trend of unmanned degree of our army in the future, it is expected that there will still be a great increase in demand during the 14th five-year Plan period and the core benefits from this process. Among them, on August 2, 2019, Tianyu Changying added 780 million yuan to an order contract with a customer, and the contract amount increased to 925 million yuan on December 5, accounting for 31.05% of the company's 2019 business income. The main model 005 series continues to consolidate the advantage of military customers, continue to sign supply contracts, and there are still follow-up purchases. In addition, the company's export-oriented UAV has been established as a military export project in 2018, which is expected to make a breakthrough in arms trade orders.
In the civil field, the company arranges civil logistics drones, and cooperates with BABA Cainiao in the "hump" project, while paying attention to promoting international business. The company has cooperated with BABA Cainiao in the "hump" unmanned logistics plan, with the promotion of domestic unmanned logistics airworthiness and other policies to benefit the domestic unmanned logistics market. In addition, Indonesia Eagle Airlines plans to purchase 100 drones and 50 unmanned helicopters from the company to transport goods between the country's islands, and is expected to set up 30 logistics centers to operate logistics drones within five years, according to Bloomberg in Jakarta. At present, the Taizhou UAV production Base has completed the assembly of many batches of UAV, with an annual production capacity of 40 UAV, which can meet the final assembly of 8 aircraft at the same time. In the future, the formal factory building will form the capacity to deliver 50 large UAV per year, which can meet the current demand for large orders.
4) Investment suggestions:
At present, the company's military UAV is the earliest stereotyped UAV model in China, with full orders on hand, and with the trend of our army's drone during the 14th five-year Plan, the role of UAV in the field of investigation is prominent, and the demand is expected to increase substantially; in the civil field, the company pays attention to the development of the international civil logistics market, and is expected to form a new performance growth point. The motor parts business is stable and is currently in the bottom lifting stage of the industry, while the recovery and layout of the automobile industry and the layout of new energy flat wire motors and the improvement of steel prices are marginal improvements. in addition, the domestic leading technology of flat wire motors driven by new energy can focus on. We expect the net profit from 2019 to 2021 to be 3.04,3.45 and 416 million yuan respectively, with a "buy-A" rating of 21.5,18.9,15.7 times the PE of the previous share price.
Risk tips: motor stator and rotor business development is lower than expected, UAV orders are not as expected, flat line business research and development is not up to expectations.
