China Automotive Research (601965) 2018 Annual Report Comments: 2018Q4 results have improved significantly and advance collection indicators have increased significantly

China Automotive Research (601965) 2018 Annual Report Comments: 2018Q4 results have improved significantly and advance collection indicators have increased significantly

Investment Highlights Event Highlights The company disclosed its 2018 annual report, with core data as follows: 2018 operating income27.

6 billion (15%), net profit attributable to mother 4.

30,000 yuan (+7 for the whole year.

5%), after deducting non-return to the mother’s net profit3.

7.2 billion (+ 22.

35%), of which the fourth quarter of 2018 operating income7.

500 million (flat for one year), net profit attributable to mothers1.

450,000 yuan (at least -7.

6%), after deducting non-return 杭州桑拿to mother’s net profit1.

2.6 billion (previously +38.

5%).

Realize operating income of 3 billion in 2019 (ten years +8.

7%) and a total profit of 5.

250 thousand yuan (ten years +9.

8%).

It is planned to distribute cash to all shareholders at every 10 shares2.

50 yuan (including tax).

  It was generally stable in 2018, and Q4 performance improved significantly, in line with expectations of the company’s new contract value in 201831.

6 ppm, a ten-year increase of 8.

9%, to ensure the steady growth of performance.

The core of revenue growth comes from special vehicles with relatively high gross profit margins, and the improvement in gross profit margin (from 25% to 26%) is mainly due to the improvement in gross profit margin of technical services and special vehicles.

The growth rate of Q4 in the next ten years was as high as 38.

5%, the core comes from: 1) Announcement of mandatory inspection business beneficiary country VI implementation brings both volume and price.

In particular, the number of passenger car National VI aircraft announcements has entered an intensive release period.

2) The effect of cost reduction and cost control of industrialized business has been enhanced.

  Fast growth in 2019 results. The worry-free annual report cited the 2019 business plan: revenue of $ 3 billion (ten years +8.

7%) and a total profit of 5.

250 thousand yuan (ten years +9.

8%), which provided the backing for the company’s performance growth this year.

The number of new car announcements and advance receipts are the two leading indicators of the company’s performance. According to the data compiled by the Ministry of Industry and Information Technology, the number and number of new car announcements for commercial vehicles in 2019Q1 increased by 153%, ushering in a period of rapid recovery.

Passenger cars increased by 40% in the first half of 2019Q1, continuing a good trend.

According to the annual report, the parent company received advance payments at the end of 20182.

400 million (ten years + 59%).

  The strategy proposes mechanism reform and innovation, and further increases the shareholder return. The annual report proposes to systematically promote the reform of mixed ownership, realize the diversification of equity structure, guide the gathering of high-quality resources to strategic industries, and orderly exit from non-strategic industries.The shareholder return plan proposes three types of dividend distribution policies in different scenarios: 1) 80% when the development is mature and there is no major capital expenditure.

2) 40% when the development is mature and there is significant capital expenditure.

3) 20% when development grows and there is significant capital expenditure.

  The company has ushered in a new round of growth under the catalysis of National Six, and continues to recommend the core reasons for optimistic about the company’s future development: 1) The volume and price of the testing business will increase with the support of National Six, which will help the rapid growth of performance in 2019-2020.

2) The wind tunnel and intelligent network testing base will become the company’s new long-term growth point.3) Continuously promote system reform and innovation, and gradually improve the company’s core competitiveness.

EPS is expected to be 0 in 2019-2021.

52/0.

64/0.

78 yuan, corresponding to PE 16.

4/13.

2/10.

9 times.
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  Risk reminder: new entrants have been announced to compulsory inspection related certification qualifications; labor costs rose more than expected

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