Top Group (601689) tracking report: waiting for recovery
The report reads that short-term performance is under pressure (reduced EPS), and is still optimistic about development potential in the long run.
Maintain BUY rating.
Key points of investment: 2019H1 passenger car production and sales 2 breakdown, the profit decline in 2019 is the year of passenger car cycle alternating, the deduction model is relatively compared to 2012, but there are three major differences: 1) the trade war brought about auto tariff reductions and share ratiosFar-reaching impact.
2) Expect a 3% cut to boost auto consumption.
3) The early implementation of National VI has disrupted the pace 杭州夜网 of industrial preparation.
The repeated negotiations of the Sino-US trade war have increased the uncertainty of the long-term development of the macro economy, thus affecting residents’ confidence in passenger car consumption.
The early implementation of National VI led to a far higher-than-expected May-June promotion of passenger cars, leading to further improvement in profitability of car companies.
Narrow passenger cars in the first half of 2019, each increase in production by 16.
5%, wholesale short-term interest rate 14.
Core customers 2019H1 production and sales number 2 ranking Geely Automobile and SAIC-GM are two of Tuopu’s core customers. According to the calculation, the revenue of the top two customers in 2018 accounted for about 50% of the total.
Under the confederation of the Association, 南京桑拿网 every seventeen percent of Geely ‘s output in the first half of 2019 is extended by 19% for wholesale replacement, 14% for SAIC-GM and 13% for wholesale replacement.
It is expected that the depreciation stalls in 2019 will still be on the rising channel. Since the company was listed in 2015, the company has actively expanded externally, with construction in progress from 1 in 2015.
4.7 billion increased to 11 in 2018.
800 million, fixed assets increased from 1.1 billion in 2015 to 27 in 2018.
700 million, depreciation and amortization from 1 in 2015.
1 ppm increased to 2 in 2018.
Although the industry’s demand has suddenly braked, the company’s capital expenditures will decline in 2019, but the pressure to solidify in the early stage still exists, and depreciation will continue to rise.
The short-term performance is under pressure, and the above three points are still optimistic in the long term, and the EPS for 2019-2021 is reduced to 0.
28 yuan (originally 1.
59), corresponding to PE is 11.
73X / 9.
66X / 7.
Top is a typical representative of the multi-category development path of auto parts. Continuous development of new products and development of new customers is the company’s core competitiveness.
Although the short-term performance is under pressure, it is still optimistic about the company’s development potential in the long run. The core points are: 1) Follow the development of the two core customers (GM + Geely); 2) Lightweight business is expected to become a new profit growth point under the catalysis of new energy, Especially in cooperation with Tesla.
Based on comprehensive assessment and future development potential, we maintain the “Buy” rating.
Risk warning: Passenger car industry demand resumes previous expectations; the passenger car industry price war lasts longer.