Event 1: the company released its 2018 annual report, with annual revenue of 2.202 billion yuan, + 6.88% compared with the same period last year; net profit of 57.9083 million yuan,-52.69%; and deduction of 50.3339 million yuan,-51.93%, of non-return net profit. Pay a dividend of 1 yuan (including tax) for every 10 shares.
Event 2: the company released its quarterly report for 2019, with revenue of 382 million yuan, year-on-year-37.21%, return-to-mother net profit of 22.2804 million yuan, year-on-year-21.48%, and non-return net profit of 4.9803 million yuan,-82.65%. It is mainly due to the sharp decline in the price of cathode materials.
Main points of investment
The main income is growing steadily, and the performance is declining due to the pressure on the gross profit margin of cathode materials:
The company's revenue in 2018 was 2.202 billion yuan, + 6.88% compared with the same period last year, mainly benefiting from the growth of the business scale of cathode materials. The company achieved a net profit of 58 million yuan in 2018,-52.69% compared with the same period last year, mainly due to the reduction of gross profit margin of cathode materials and reduced investment income.
From a business point of view, the income of lithium battery cathode materials in 2018 was 1.461 billion yuan, + 17.90% compared with the same period last year; the income of lithium battery equipment was 597 million yuan in 2018,-12.86% year on year; and the income of rare earth luminescent materials was 93 million yuan, + 0.69% year on year.
Profitability declined and expenses improved slightly during the period
The company's 2018 comprehensive gross profit margin of 15.66%, year-on-year-2.37pct, declined; sub-business point of view, cathode material 8.89%, year-on-year-3.01pct; lithium equipment gross profit margin of 30.72%, year-on-year + 1.19pct, increased. Sales net interest rate 2.64%, year-on-year-3.32pct; weighted ROE is 4.04%, year-on-year-4.98pct. The decline in gross profit margin is mainly due to the continuous decline in the price of cathode materials in 2018 with the decline in the price of raw material cobalt. We believe that with the stabilization of the price of cathode materials and the gradual upgrading of the company's product structure to the high end (High Nickel 811), the company's ternary cathode materials are expected to enter the supply chain system of first-tier manufacturers, profitability is expected to pick up, and performance is expected to stabilize in 2019.
During 2018, the expense rate totaled 12.10%, year-on-year-0.02pct, of which the sales expense rate was 1.77%, year-on-year-0.87pct; the management expense rate (including R & D expenses) was 7.58%, year-on-year-1.22pct; and the financial expense rate was 2.75%, year-on-year + 2.07pct, mainly due to the substantial increase in interest expenses caused by the increase in bank loans.
The company intends to acquire Yuchen Automation and Chengjie Intelligence, which will have a synergistic effect with the ability of the whole line.
By issuing shares and acquiring Yuchen Automation of liquid injection equipment with 450 million, the company plans to acquire Chengjie Intelligence, the subject of winding equipment, with 650 million. Yuchen's products are the middle and rear equipment of battery production, and Chengjie's intelligent products are mainly the core equipment of core production. We believe that after the successful acquisition, Keheng is expected to open up the entire lithium battery production line, and the two target companies can form a good synergy with Haoneng's leading equipment business, and further enhance the competitiveness of Keheng in the field of lithium battery equipment.
Haoneng Science and Technology join hands with engine Technology to layout hydrogen fuel Cell equipment
In April, Haoneng Technology, a wholly-owned subsidiary of Ke Heng Co., Ltd., and Suzhou engine Technology reached a framework agreement on the research and development of equipment and business for membrane electrode projects. Engine Technology is a manufacturer of membrane electrodes for the core components of hydrogen fuel cells, with rich experience in market development, commercial operation and production management. This cooperation is conducive to the improvement of equipment R & D capability and business development in the hydrogen fuel cell field of Haoneng Technology, accordingly broadens the range of Haoneng technology products, and has a positive impact on the promotion of the company's core competitiveness.
Profit forecast and investment rating: if the acquisition factors are not taken into account, the company's 2019-2020 net profit is expected to be 11,000,000, corresponding to the current share price PE is 35ex25X; if this acquisition is considered, the company's 2019-2020 exam net profit is expected to be 215exp 275m, corresponding to the current share price PE of 21ppm 17X, maintaining the "buy" rating.
Risk hint: industry competition intensifies, post-acquisition synergy is less than expected, and hydrogen fuel cell development is not as expected.
