Hongfa shares (600885) quarterly report comments: performance basically in line with expectations and wait for industry demand to recover

Hongfa shares (600885) quarterly report comments: performance basically in line with expectations and wait for industry demand to recover

Key points of investment: The company released the third quarter report of 2019, and achieved operating income of 51 in the first three quarters.

杭州夜網論壇
48 ppm, an increase of 1 per year.

87%; realize net profit attributable to shareholders of listed companies.

$ 5.6 billion, a five-year average of 5.

54%; Realize non-recurring net profit attributable to shareholders of listed companies5.

$ 26 trillion, an average of 4 per year.

80%.

The company’s performance basically met expectations.

Ping An’s point of view: The performance is basically in line with expectations, and the leading addition is still solid: the company achieved operating income of 51 in the first three quarters.

48 ppm, an increase of 1 per year.

87%; realized net profit attributable to mother 5.

56 ‰, an average of 5 in ten years.

54%; Realize non-recurring net profit attributable to shareholders of listed companies5.

26 ppm, 10-year average4.

80%.

The company achieved operating income of 17 in 3Q19.

41 ppm, a 10-year increase2.

54%; net profit attributable to mothers2.

10,000 yuan, a ten-year average of 9.

06%.

Affected by weaker demand from home appliances, automobiles and other industries, the company’s performance declined slightly; in 18 years, the company’s relay business has a global market share of more than 14%, which has surpassed Omron’s ranking, and the company’s continuous efforts in the automotive, signal relay and other fieldsTherefore, the market share strives to continue to increase.

Smart meter replacement continued to increase volume, and promoted the rapid growth of the power relay business: starting in the second half of 18, domestic smart meters have gradually entered the tide of replacement, and the two batches of smart meters in the State Grid in 19 years were 3816/3564 million, gradually reducing.Up 39.

8%.

In the field of power relays, the company’s global market share has increased by 53% in the past 18 years, and the number of replacements in the first half of the year was about 7.

500 million US dollars, an increase of about 23% a year.

It is expected that the company’s share will increase in the European and American markets and the rapid growth of demand in Southeast Asia and other regions, as well as the expansion of the continuous volume of internal smart meter retrofitting. The company’s power relay business will help maintain a rapid growth rate.

The household appliances and automotive relay businesses are affected by the industry and are expected to improve ahead of time: According to the National Bureau of Statistics, the volume growth rate of air conditioners / household refrigerators / household washing machines in the first three quarters of 19 was 6 respectively.

4% / 4.

3% / 7.

At 5%, the output of air conditioners and refrigerators in September exceeded the growth rate in a single month and has slightly improved.

We expect that the reorganized real estate will enter the completion cycle, and the demand for home appliances is expected to gradually recover, driving the recovery of the company’s general relay business.

The extent to which the automotive relay business is affected by the expansion of the domestic automobile market. The domestic automobile output in the first three quarters of 19 years was 18.09 million units, which gradually exceeded 12%, and the change was gradually narrowing.

c18 The company ‘s automotive relay business has a global market share of 8%, and Panasonic ‘s 22% market share has room for replacement. At present, the company is advancing the development of new customers such as Mercedes-Benz. It is expected that the domestic automotive market will gradually adjust to the end and the company’s market share will continue.Ascension is expected to return to the growth track in 20 years.

The high-voltage DC and low-voltage electrical appliances business is progressing smoothly and has become an important growth point for the company: the company currently has 8 high-voltage DC relay production lines with an annual production capacity of 6 million, and is expected to double its production capacity in 20 years;Shangshang is at the leading level. In addition to supplying to domestic automakers such as BAIC and BYD, it has become the main supplier of the Volkswagen MEB platform and entered the supply chain of Mercedes-Benz and Tesla.

As the development of new energy models for joint venture car companies accelerates, the high-voltage DC relay business is expected to maintain rapid growth.

The company’s low-voltage electrical appliance business has a good momentum of development. In the past two years, it has gradually improved in product categories, supply chains and manufacturing equipment. Currently, it mainly supplies customers in the overseas power industry.Positioning brand image.

It is expected that through the completion of the company’s low-voltage electrical appliance business, the shortcomings in the product and marketing end will usher in a rapid volume phase.

Investment suggestion: The company has created a vertically integrated product R & D and production model by covering the upstream of the industrial chain, building the company’s core competitiveness, and transforming it into a company’s continuous expansion and complementary benefits.The rate will continue to increase. The company’s general purpose, automotive relay business is expected to resume in 20 years, power relays, high-voltage DC relays and other businesses to maintain rapid growth.

We maintain our forecast for the company’s EPS for 19/20/21 to be 1.

05/1.

23/1.

51 yuan, corresponding to PE on October 30 is 24.

1/20.

7/16.

8. Maintain the “Recommended” level.

Risk Warning: 1.

If the policy expands the real estate industry beyond expectations, resulting in faster growth in completed areas, it will reduce the demand for the home appliance industry, so the company’s general relay business is adversely affected.

2.

If foreign investors increase investment in the relay industry again, it will increase the degree of competition in the relay industry and affect the company’s gross profit margin.

3.

If the sales of new energy vehicles decline, it will affect the company’s high-voltage DC relay business revenue growth.