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Wolong Electric Drive (600580): Performance meets Shen Wanhongyuan’s expected profitability

Wolong Electric Drive (600580): Performance in line with Shen Wanhongyuan’s expected profitability steadily improved

The company released the 2019 third quarter report.

The company achieved operating income of 32 in the third quarter.

41 ppm, an increase of 14 per year.

13%; realize net profit attributable to mother 2.

10,000 yuan, an increase of 19 every year.

11%; the company achieved operating income of 92 in the first three quarters.

51 ppm, an increase of 12 per year.

48%; net profit attributable to mother 8.

11 ‰, an increase of 81 per year.

94%.

The performance is in line with Shen Wanwanyuan’s expectations.

  Investment points: The performance is in line with Shen Wanhongyuan’s expectations. Revenue and net profit attributable to mothers have increased steadily.

In the first three quarters, the company achieved operating income of 92.

51 ppm, an increase of 12 per year.

48%; net profit attributable to mother 8.

11 ‰, an increase of 81 per year.

94%; net profit deducted from non-attributed mothers5.

470,000 yuan, an increase of 24 in ten years.

36%.

The non-performance growth was mainly due to the continuous improvement of the technical content of the company’s motors and control products, supplemented by the higher prosperity of the downstream industry. The company achieved a comprehensive gross profit margin of 26 in the first three quarters.

65%, increase by 1 every year.

5 units.

The higher non-recurring gains and losses are mainly due to the fact that financial assets such as Hongxiang shares were accounted for as trading financial assets in the first half of the year, and the increase in fair value contributed 300 million investment income.

From May 30, 2019, the company’s equity investment in Hongxiang shares was converted from transactional financial assets to long-term equity investment. 北京夜网 The company’s performance growth in the third quarter returned to normal levels.

In the first three quarters, the company’s period expenses were 19.

48%, an increase of 1 per year.

9 units, of which R & D costs have increased by at least 13.

51%, and management costs increase by 25 per year.

03%; As a result of the increase in loan expenses and exchange gains from the acquisition of GE’s small industrial motor business, the company’s financial expenses increased by 130.

18%.

It has been fixed by ZF, a large global automotive supplier, and its technical strength has been recognized by global leaders.

The company actively develops new energy automobile motor business, and provides new energy motor products to customers such as BAIC and Yutong with accumulated technology and application experience.

In June 2北京桑拿洗浴保健019, the company won a fixed point from the global large-scale automotive supplier ZF Company to supply the core parts and motor products of the new energy vehicle drive system. ZF Company has extremely high requirements on the supplier’s technology, quality and guarantee system.

We believe that the signing of this contract is a reflection of the company’s recognition by leading international manufacturers and an important progress of the company’s global strategy to promote the new energy vehicle motor business.

Wolong Electric Drive is expected to provide ZF with new energy vehicle motors and their components by 2020. The expected sales amount of the model corresponding to the fixed-point signal in its life cycle is RMB 22.

5.9 billion.

This time the company officially entered the ZF supply system, this is just the beginning. The follow-up cooperation with multiple models is worth looking forward to.

The Vietnam plant was successfully put into operation, and GE’s motor business was successfully delivered, and the layout was advanced in an orderly manner.In June 2018, Wolong Vietnam went into production smoothly. The total investment in Vietnam’s engineering is about 30 million US dollars. The main products are high-end household air-conditioning motors, washing machine motors, kitchen appliances and garden tool motors, etc. The capacity scale will reach 10 million units / year.

This is the company’s first overseas self-built factory since implementing the high-level strategy, and the company’s layout has basically been realized.

In addition, the company’s acquisition of GE’s motor business has greatly enhanced the sales capacity of the North American market and relied on GE’s Mexican plant to obtain better terms of trade with the United States.

At this point, the company successfully achieved production layout across Asia, Europe and the Americas, and the first multinational company with China as its headquarters in the industry was formally formed.

Maintain profit forecast and maintain “Buy” rating: We maintain our expectation that the company’s net profit attributable to the parent for 2019-2021 will be 10.

63, 9.

51 and 10.

52 trillion, the corresponding EPS is 0.

82, 0.

74, 0.

81 yuan / share, the current sustainable corresponding PE is 10, 11, 10 times.

Maintain “Buy” rating.

Risk warning: downstream coal, steel, oil and gas and other industries demand decline; overseas market development is less than expected.