China Automotive Research (601965) Company Dynamics Comment: First-quarter results exceed expectations but consistently optimistic about its long-term value
Core point of view events: China Automobile Research recently released the first quarter report of 2019, and the company achieved total operating income of 5 in the first quarter of 2019.
01 billion, down 22 a year.
33%, achieve net profit attributable to mother 0.
94 ppm, an increase of ten years8.
43%, the net profit of non-attributed mothers was reduced to 0.
90 ppm, a ten-year increase4.
Parent company statement: The parent company realized operating income in the first quarter of 20192.
08 billion, down 3 every year.
37%, achieving a net profit of 0.
8.3 billion, down 7 a year.
We have the following comments: From the perspective of revenue, the company’s performance in the first quarter exceeded expectations and was mainly dragged down by the special vehicle business.
In the first quarter of 19th, the company’s low gross profit margin (less than 5%) of the large-scale negative growth of the special vehicle business income led to the company’s total revenue receipts.
More than 70% of the company’s special vehicle business income in 18 years came from chassis direct sales, and the rest was car modification.
China ‘s heavy truck chassis sales increased by 80 in the first quarter of 2018.
1%, negative growth of 5 in the first quarter of 19.
The special vehicle business of Auto Research has accompanied the development of the industry. In the first quarter of 19, the negative growth rate of special vehicle business revenue exceeded 30%, and the special vehicle business revenue accounted for 49%.
5% (2018), so the performance of the company’s revenue in the first quarter exceeded expectations was mainly dragged by the special vehicle business.
The revenue of the technical service business in the first quarter of 19 was basically the same as that in the same period of 18 years, which was lower than market expectations, but there were specific reasons.
From the parent company statement, we can see that the parent company realized operating income in the first quarter of 20192.
08 billion, down 3 every year.
It was previously thought that the national five and six national stimulus will stimulate the company’s engine emissions testing business volume. The company’s technical service business revenue growth rate should be higher in the first quarter, but the parent 杭州桑拿网 company’s statement shows that technical service revenue is basically flat with last year.
The main reason is that the testing cycle of many testing projects in China VI is longer than that in China V. The income settlement time of many projects is just after the first quarter of 19th.
From the perspective of the profit side, due to the decline in the proportion of low-margin special-purpose vehicle business, the company’s comprehensive gross margin and net profit margin have increased significantly, and its profit has increased positively under the negative growth of revenue.
The gross profit margin for 2019Q1 was 30.
24%, an increase of 6 over the same period last year.
0pct, net interest rate is 19.
04%, an increase of 5 over the same period last year.
This increase does not reflect a substantial change in its profitability, but it is only due to the high proportion of revenue from the special vehicle business 49.
5% (2018), gross profit margin decreased by 5%, and the special vehicle business negative growth of more than 30% in 19Q1 led to an increase in comprehensive gross profit margin and net profit margin.
Continue to be optimistic about the company’s growth in 19-20 years. The main sources of performance growth are the following three points: ① The growth of the national engine inspection business will continue at least until 2020.
Starting from July 1, 2019, only some regions require light gasoline vehicles to meet the National Sixth Standard, and it will be implemented nationwide on July 1, 2020.
The company ‘s National Six engine emissions testing began in the second half of 2018. It is expected that some representative products of OEMs in 19 years will meet National Six standards, and more products will be converted to National Six standards in 2020.Therefore, the business volume of the national six engine inspection in 18/19/20 will continue to increase. Do not worry about the problem of unsustainable orders after the outbreak of 19 years. The growth of the national six engine inspection business can continue at least until 2020.
② The rapid growth of the company’s new energy vehicle-related business will also promote the company’s performance.
The company’s technical service revenue from new energy vehicle business has accounted for more than 20% (technical service revenue from new energy vehicles in 2017 has reached 200 million yuan), and 19 and 20 years are just foreign joint venture car companies andTwo years after the car models of the new power generation are concentrated in the market, there will be a blowout increase in the types of new energy vehicles.
③ The company’s two largest projects, the wind tunnel laboratory and the intelligent network integrated test track, were put into operation in 19 and 20 respectively.
The wind tunnel laboratory and the intelligent network integrated comprehensive test track project are both very scarce capacity, and demand and profitability are very guaranteed.
The company’s annual report clearly proposes a mix of all method reforms, an orderly exit from non-strategic industries, innovative incentive distribution mechanisms, a multi-pronged approach, comprehensive improvement of the governance structure, and enhanced profitability.
The company prepares for the system to carry out mixed ownership reform to achieve diversification, and then it may be possible to re-excellent private capital; guide the gathering of high-quality resources to strategic industries (intelligent connected car testing and the construction of a data platform for the four major indexes, etc.);Strategic industries (possibly divesting some of the manufacturing business assets with extremely low profit margins); innovative incentive allocation mechanisms, establishing multiple incentive modes such as job value, fair incentives (the company has reduced some measures in 18 years: equity incentives, industrialized manufacturing businessThe three sectors have dated professional managers, technical service businesses to build new sales teams, etc.).
Investment suggestion: The company is an excellent target with growth attributes that doubles in volume and price + Davis double-click, and is less affected by the car cycle.
In the short-to-medium term, the company has benefited from the national emission standards of five to six. The number of electric vehicle models has increased significantly in recent years and the rapid development of connected smart cars.
From a long-term perspective, the company benefits from the increase in R & D spending of Chinese auto companies.
Increasing competition between manufacturers, shortening the replacement cycle, speeding up the introduction of new cars, increasing the technological content of auto consumption upgrades, and reverse development to forward development are driving cars to increase research and development expenditures, which provides a good track for China Automotive Research’s growth.
It is conservatively estimated that the company’s total revenue for 2019-2021 will be 31 in turn.
02 trillion, the growth rate is 13 in turn.
55%, the net profit attributable to mother is 4 in turn.
1.6 billion, with a growth rate of 22 in turn.
1%, the current market value is 78.
9 trillion, corresponding to PE in order of 15.
0 times, corresponding to 19 years of dividend placement3.
Taking into account the current market risk appetite, the company’s industry and the company’s own fundamentals, the company is given a reasonable estimate of 25 times the PE in 2019, with a 19-year target price of 12.
76 yuan, maintaining the “recommended” level.
Risk reminders: ① the progress of the National Six Standards has fallen short of expectations; ② the popularity of intelligent connected cars has fallen short of expectations; ③ the growth of car sales has fallen short of expectations;