Xinquan Co., Ltd. (603179): Product support from independent to joint venture is expected to improve profitability
Performance is in line with expectations.
The company achieved operating income of 21 in the first three quarters.
45 ‰, an average of 18 in ten years.
6%, to achieve net profit attributable to mother 1.
31 ‰, 42 years ago.
7%, net of non-attributed net profit1.
2.2 billion, previously 45 per second.
7%, EPS is 0.
The lower growth rate of net profit was mainly due to lower gross profit margin and higher period expense ratio.
Affected by the growth rate of sales of downstream customers, the short-term gross margin of the company affected was 21 in the first three quarters.
3%, ten-year average 1.
Nine averages, of which the gross profit margin in the third quarter was 20%, which was extended by 3.
1 average value, the ring value is 0.
The 7 averages are expected to be mainly due to the increase in sales volume of downstream car companies, which will affect the revenue scale and increase production capacity to generate depreciation, which will lead to a decline in gross profit margin.
Expenses during the first three quarters14.
3%, an increase of 2 per year.
2 units; management expense ratio (including R & D expenses) 8.
8%, an increase of 1 per year.
6 units, of which R & D expense rate increased by 0.
The company’s net cash flow from operating activities in the first three quarters was -1.
78 ‰, with a ten-year average of 139.
8%, mainly due to an increase in bank acceptances and an increase in cash payments.
Revenue improved in the third quarter, and the company ‘s product portfolio expanded from autonomous to FAW-Volkswagen, which is expected to increase profitability and estimate levels.
Realized operating income in the third quarter6.
970,000 yuan, an increase of 0 from the previous month.
4%, ten-year average.
1%, narrowing the excess by 10.
1 single; 3774 net profit attributable to mother.
50,000, the molecular weight is 1.
From the perspective of the company’s downstream customers’ sales in the third quarter, Geely Auto Parts17.
2%, narrowing beyond 7.
4 units; SAIC passenger cars grow by 6 per year.
6%, the growth rate improved by 15.
4 single; improved sales of downstream customers drove the company’s revenue improvement.
The company actively expands new customers. Among its own brands, this year has been equipped with BYD, GAC Weilai, GAC New Energy and other models. The joint venture brand, Sinotech, has been equipped with FAW-Volkswagen Jetta new models. The SUV VS5 and sedan VA3 were launched in September.Reaching 8,140 and 2,940 vehicles is expected to become the company’s profit growth point.With the overall stabilization of the auto industry and the improvement in sales of downstream car companies, the company’s profit improvement is expected to improve in the fourth quarter.
Financial forecast and investment proposal: slightly adjust the expense ratio and gross profit margin. It is expected that the EPS for 2019-2021 will be 0.
71 yuan (originally 1.
81 yuan), with reference to comparable company estimates, giving the company 13 times PE in 2020, with a target price of 17.
55 yuan, maintain BUY rating.
Risk warning: Passenger car industry demand is lower than expected, and passenger car and commercial vehicle 杭州桑拿网 trim products are less than expected.