Xusheng shares (603305) 2019 third quarterly report comments: profitability slightly improved MoM waiting for Tesla volume

Xusheng shares (603305) 2019 third quarterly report comments: profitability slightly improved MoM waiting for Tesla volume

Guide to this report: Benefit from Tesla’s delivery volume in the third quarter +16 for half a year.

2%, the company achieved revenue of 2 in Q3.

740,000 yuan (at least -17.

53%, +8.

83%), net profit attributable to mother 0.

51 ppm (decade -47.

21%, +10.

86%).

Investment Highlights: Maintain the “overweight” rating.

Raise target price to 36.

50 yuan (originally 29.

31 yuan).

Company Q3 revenue 2.

740,000 yuan (at least -17.

53%, +8.

83%), net profit attributable to mother 0.

51 ppm (decade -47.

21%, +10.

86%), EPS is 0.

13 yuan, the performance was slightly lower than expected.

As Tesla discontinued the Model S / X 75D models this year, the company’s high-margin products decreased, resulting in a decline in comprehensive gross profit.

Are we downgrading the company 2019?
EPS is 0 in 2021.

56 (formerly 0.

92) / 0.

69 (Original 1.

11) / 0.

95 (original 1.

22) Yuan. Due to the intensive expansion of the company’s new production capacity and the immediate localization of Tesla, the company is expected to promote repairs and go up.

50 yuan (originally 29.

31 yuan), corresponding to 38 times PE in 2021.

Benefiting from localization, in the fourth quarter and 2020, the high probability Tesla will continue to increase its volume, thereby improving Xusheng’s profitability.

Tesla’s Shanghai Super Factory is currently trial-producing cars, painting, and final assembly, and the total production is expected to reach 1,000-2000 units by the end of the year.

Production at the new plant is expected to begin in 2020, with annual production expected to reach 500,000 units after full replenishment.

The company’s 淡水桑拿网 operating and financial conditions in the third quarter were sound.

The gross profit margin was +2 from the previous month.

49%.

New products and new customers are advancing steadily.
The company’s No. 4 plant is gradually put into use, and the No. 5 and No. 6 plants are expanding production. New products such as gearbox housings, battery cases, and forged castings are in line with the future trend of lightweighting.
Clients, with the exception of Tesla, the company is actively exploring new customers such as Great Wall, GAC, and Mercedes-Benz.

Since the company went public, it has raised funds to invest in new aluminum alloy products through ipo, convertible bonds, and non-public issuance (planned) to open up room for growth.

Catalyst: Domestic Tesla prices announced.

Risk reminder: The uncertainty of the Sino-US trade war and the risk of increased competition in the electric vehicle industry.