Event
The company released its 2018 semi-annual report. During the reporting period, the company's operating income was 595 million yuan, an increase of 9.52% over the same period last year, and its net profit was 44 million yuan, down 21.77% from the same period last year.
Brief comment
The increase in the price of raw materials and the change of product structure affect the stability of gross profit margin
During the reporting period, the company's intelligent controller business revenue increased by 39.59%, promoting the company's overall revenue to increase by 9.52% compared with the same period last year. However, due to the increase in the price of raw materials and changes in product structure, the company's net profit fell 21.77% compared with the same period last year. From each business point of view, automotive application business, achieved revenue of 259 million yuan, basically the same as the same period last year. In the sewing machine application business, revenue reached 108 million yuan, down 7.31% from the same period last year. The revenue of the intelligent controller business reached 186 million yuan, an increase of 39.59% over the same period last year. From the point of view of gross profit margin, the gross profit margin of automotive application business fell 2.22pct compared with the same period last year, due to the rising price of raw materials for Xinneng vehicle motors and the pressure of product price reduction. The gross profit margin of the sewing machine business fell 5.99pct compared with the same period last year, but it is basically the same as last year. Gross profit margin is expected to improve in the future as production capacity continues to transfer to Vietnam. The gross profit margin of the intelligent controller business fell 1.3pct compared with the same period last year, but compared with the whole of last year, it rebounded. With the continuous breakthroughs in the company's product categories and the upgrading of the application field, the gross profit margin is expected to continue to improve.
The soft and hard power increases simultaneously, and the downstream customer resource support potential is released.
(1) the improvement of software and hardware: the company continues to invest vigorously in research and development, and further builds founder Motor Research Institute on the existing research system with the company as the main body, relying on universities and scientific research institutes, with annual sales of not less than 4% of the R & D fee. Great efforts are made to develop a series of new energy vehicle integrated system products in order to develop an electric drive system with independent intellectual property rights. At the same time, the company will complete the motor automation transformation of the automobile motor production line by the end of 2018, and plans to realize the automatic feeding of AGV cars in the whole workshop by 2020. The company vigorously carries out research and development and manufacturing innovation, which helps to enhance product competitiveness, reduce costs and improve efficiency; (2) in terms of new product development, the company embraces changes in the new energy vehicle market and continues to promote the research and development and mass production of the electric drive integrated system. At the same time, the electric drive integrated system is about to be assembled, and SAIC GM Wuling Baojun E200 model equipped with the drive system will be put on the market soon. New products bring new markets, the company's continuous innovation will achieve a more stable industry position; (3) in terms of customers, the company's customer structure is high-quality. As a leading enterprise in the domestic new energy drive motor and electric drive system industry, the company has a comprehensive market share of nearly 7%, and the market share of logistics vehicle assembly products ranks first in the country. The company's drive motor products cover a full range of electric vehicles, such as passenger cars, logistics vehicles, low-speed cars and buses, and have entered Wuling, Geely, Zhongtai, Dongfeng, Yuchai, Yutong, Yujie and other supporting systems. The company successfully broke into Geely's supply chain, marking the expansion of the company's passenger car motor supply model from A00 class to A class. Excellent customer resources form a strong support for the company's revenue explosion.
Profit forecast: the company's net profit from 2018 to 2020 is expected to be 100 million yuan, 172 million yuan and 269 million yuan, respectively; the corresponding EPS is 0.22, 0.38 and 11.4 times of 30.6 and 17.8, respectively, maintaining the "buy" rating and the target price is 9.00 yuan.
Risk hint: the development of the new energy vehicle industry is not as expected; the price of drive system products is falling faster than expected; and the company's new products are not as expected.
