Core point of view
The effect of the company's industrial transfer strategy showed that the cost end of lead acid and lithium electricity business improved, and the cost end is expected to fall back to stable after a short-term rise. The company plans to raise an additional 1.415 billion yuan to continue to increase the size of the fuel cell industry, and a wide range of power products is expected to take the lead in the market. Considering the lower-than-expected growth rate of lead-acid and lithium battery revenue and the impact of non-recurring profits and losses on profits, the EPS forecast for 2019-2021 is adjusted to 0.53 EPS 0.55max 0.65 yuan (formerly 0.49max 0.56 pound 0.69 yuan), corresponding to PE39/38/32 times. Maintain the target price of 23.70 yuan, corresponding to 2019 45 times, maintain the "overweight" rating.
2019H1 revenue / return net profit 13.60 million RMB 0.84 million (- 14.11% Universe 197.56%). The company's revenue in the first half of 2019 was 1.36 billion yuan (year-on-year-14.11%, the same below), of which lead acid / lithium electricity was 10.32 / 298 million yuan, which was 23.46% lower than expected, resulting in negative revenue growth. The return net profit is 84 million yuan (+ 197.56%), and the non-return net profit is 23 million yuan (- 20.19%). The non-recurrent profit and loss are mainly investment income and fair value change income.
The effect of the industrial transfer strategy appears, and the expense rate rises in the short term. The company's 2019H1 gross profit margin is 16.10% (+ 3.49pcts), of which the lead acid / lithium battery gross profit margin is 14.33% and 21.54% (+ 4.24/+1.31pcts), which is the strategic effect of the transfer of the industry to the cost depression (Hubei, Vietnam). During the period, the expense rate is 13.17% (+ 2.75pcts), of which the sales / management / financial cost is 4.08%, 6.89% and 2.11% (+ 0.66/+1.17/+0.94pcts). The increase in the management expense rate is the settlement fee generated by the industrial transfer process, and the impact is expected to be gradually reduced to eliminated in the future. The increase in the rate of financial expenses is due to an increase in exchange losses. The net profit margin is 6.06% (+ 4.69pcts), which is affected by the increase in expense rate during the period, deducting the non-net interest rate of 1.69% (- 0.13pcts).
Fixed increase to raise funds to increase the size of the fuel cell industry, the products cover a wide power range of 45-87kW. The company raised 1.415 billion yuan in non-public offerings, all in the direction of fuel cell-related projects. Among them, the Wuhan industrialization Base / Shenzhen Industrial Park / Shenzhen Die Stack R & D project raised 523 Universe 0.92 billion yuan respectively. At present, the company has invested in five companies in the clamping links of the stack, membrane electrodes, hydrogen production and other industrial chains, and the revenue of 2018/2019H1 fuel cells is 0.83 billion yuan. It is expected that 2019H2 fuel cells will release their performance throughout the year after the subsidies are landed.
The company has developed a 45/61/87kW fuel cell engine, and we have determined that the technical requirements of fuel cell subsidies in 2019 will be higher, and the subsidy threshold will rise from 30kW to 40kW, and it is expected that it will continue to rise in the future. The company takes the lead in the production of fuel cells with high power, and is expected to occupy the market opportunity in the future.
Risk factors: lead acid, lithium business demand growth is not as expected, fuel cell vehicle sales are not as expected.
Investment suggestion: the effect of the company's industrial transfer strategy appears, the cost end of lead acid and lithium power business is improved, and the cost end is expected to fall back to stable after a short-term rise. The company plans to raise an additional 1.415 billion yuan to continue to increase the size of the fuel cell industry, and a wide range of power products is expected to take the lead in the market. Considering the lower-than-expected growth rate of lead-acid and lithium battery revenue and the impact of non-recurring profits and losses on profits, the EPS forecast for 2019-2021 is adjusted to 0.53 EPS 0.65 yuan (the original forecast is 0.49max 0.56 shock 0.69 yuan), corresponding to PE39/38/32 times. Maintain the target price of 23.70 yuan, corresponding to 2019 45 times, maintain the "overweight" rating.
