Main points of investment:
The operation of Q2 company is growing rapidly, and its profit margin is obviously improved.
1) H1 Company achieved revenue of 803 million yuan, an increase of 6.31% over the same period last year, of which Q2 revenue was 496 million yuan, an increase of 33.43% over the same period last year, mainly because the strong recovery of truck production and sales represented by medium and heavy trucks since Q2 led to the rapid growth of supporting income of the company. The return net profit of H1 company was 89 million yuan, up 30% from the same period last year (adjusted for the same period). The net profit after deducting non-profit was 59 million yuan, an increase of 10.74% over the same period last year, of which Q2 was 59 million yuan, an increase of 169.75% over the same period last year, and 54.29% after deduction. In addition to being driven by revenue, proper control of the cost side is also an important reason: the sales cost rate of H1 company decreased 1.45pct over the same period last year (the corresponding gross profit margin increased 1.45pct). During the period, the expense rate decreased 0.49pct compared with the same period last year, and Q2 decreased 1.89/3.51pct respectively.
H1 company net interest rate 11.03%, year-on-year increase 1.34pct, of which Q2 is 11.90%, respectively increased 4.64/2.28pct compared with the same month-on-month, profitability significantly improved. 2) the net operating cash flow of H1 company was 164 million yuan, down 32% from the same period last year, mainly due to the decrease in the discounted amount of bank acceptance bills of exchange, the net profit ratio of cash flow was 185%, and the operation quality was high.
New customers and new products work together to support the future growth of the company.
The company's automotive crankshaft is mainly used for automotive internal combustion engine, there is a 1:1 ratio relationship. Therefore, the sales of downstream automotive internal combustion engines will directly affect the demand of matching crankshafts. While the company has made remarkable achievements in the development of new products for old customers, the company is also actively developing new customers and has become a supplier of crankshafts and blanks to large international enterprises such as Mercedes-Benz, BMW, Volvo, Cummins, Hino and Yangma. and enter SAIC GM, Sinotruk, Fukuda Cummins and other customer supply system. The market scale of automotive crankshaft is large, as the company expands its customer base and continues to bring new orders, and increases the R & D and production of high-end products, the market share is expected to continue to grow and profitability will continue to improve, among them, foreign markets are expected to become the company's medium-and long-term growth point.
Enter the field of large crankshaft and enjoy the rise of quantity and profit in the future.
The company has established a joint venture with Alfen, Germany, the world's largest independent supplier of large crankshafts, to lay out the large crankshaft market, which is mainly used in many fields such as ships, construction machinery and nuclear power generator sets, with considerable market space and high unit price and profit margin of large crankshafts. Therefore, the company actively develops the large crankshaft matching market, which will help to improve the company's growth space and profit margin in the future.
Layout precision forgings business to help reduce cost and increase efficiency
Fuda forging, a wholly owned subsidiary, is mainly engaged in precision forging products. In 2015-19, the output of precision forgings increased from 667100 to 1.6645 million, with an annual compound growth rate of 25.68%, and a corresponding annual compound sales growth rate of 23.17%.
Fuda forging pays equal attention to both inside and outside, which effectively extends the company's product industry chain, improves the company's technology and equipment level, helps to reduce costs and increase efficiency, and helps to develop high-quality customers on the outside. With the completion of the forging digital and intelligent forging technology upgrade project and the proposal to increase the construction of large crankshaft blank forgings, the matching capacity of the company's precision forgings will continue to be significantly improved in the future. so as to further help the company to achieve the dual goals of customer development and cost reduction and efficiency.
Raise profit forecast and maintain "overweight" rating
Taking into account the steady growth of infrastructure in the second half of the year, the resilience of real estate investment and the concentration of the elimination of high-emission vehicles, the production and sales of trucks represented by medium and heavy trucks are expected to continue to grow rapidly, we raise our profit forecast: the company's EPS in 2020-22 is expected to be 0.28 EPS 0.31 shock 0.37 yuan per share, corresponding to the 2020-22 PE is 29-26-21 times, taking into account the active development of high-end market and layout of large crankshaft field The future growth and profit space will be opened to maintain the "overweight" rating.
Risk hints: automobile production and sales are depressed and exceed expectations; customers and large crankshaft market development are lower than expected; steel prices are rising faster than expected
