Little Swan A (000418): strong execution ability, fast transition effect

Little Swan A (000418): strong execution ability, fast transition effect

2018 results are higher than expected The company’s 2018 results: operating income of 236.

400 million, an increase of 10 in ten years.

5%; net profit attributable to parent company 18.

6 ppm, an increase of 23 in ten years.

6%, profit 2.

94 yuan.

Operating income for the fourth quarter of 201862.

2 ‰, an increase of 15 in ten years.

0%; net profit attributable to parent company 5.

20,000 yuan, an increase of 41 in ten years.

8%.

In the fourth quarter of 2018, revenue exceeded expectations and retinal pigmentation drove performance beyond expectations.

Initial special dividend 4.

0 yuan, 2018 dividend rate of 135.

8%.

Good financial indicators and good operating results: 1) Gross profit margin 26.

2%, a year to raise 0.

9ppt; Net profit (including minority shareholders’ profit and loss) rate 9.

0%, increase by 1 a year.

0ppt.

Return on net assets 24.

3%, increase by 1 every year.

2ppt.

2) The cash flow is good, and the cash at the end of the period is 161.

600 million yuan, an increase of 22 over the beginning of the period.

10,000 yuan.

Execute T + 3, ending inventory 17.

600 million, down 2 from the beginning of the year.

300 million.

3) The sales volume and price 杭州夜网 went up, and the sales volume of washing machines was 21.15 million units, an increase of 3 per year.

4%, the average ex-factory price was previously increased by 7.
.

5%.

Market resilience is strong: 1) In the face of market demand differentiation in 2018, Haier Casa Di competed at the high end and Xiaomi competed at the low end. The company once lost market share.

1Q / 2Q / 3Q / 4Q revenue growth rate of 19.

7% / 7.

5% /-0.

9% / 15.
0%.
2) The company adjusts its strategy in time to cope with multi-brand operations.

Midea’s brand positioning is cost-effective and actively expands the market. In 2018, revenue increased by 27%.

Little Swan brand positioning is mid-to-high end, with an average price increase of 12%.

Beverly’s benchmark against Casarti has grown significantly by 222% in 2018.

AVC monitors offline channels, and Beverly’s retail sales accounted for 2% in 2018.

5%, the market share is increasing rapidly.

The development trend Midea Group will absorb the merger of Little Swan by issuing A shares, which is expected to be completed in 2Q19.

Earnings forecasts take into account higher-than-expected income and the impact of declining growth rates, raising the 2019/20 EPS estimates by 5% / 5% to 3.

37 yuan / 3.

87 yuan.

Estimates and recommendations maintain recommended levels.

Raise target price by 11% to 72.

82 yuan, corresponding to 22x / 19x 2019 / 20eP / E, compared with the current increase of 28%.

The company currently corresponds to 17x / 15×2019 / 20e P / E.

Risk Market demand fluctuation risk.