FAW Fuwei (600742): Improved consolidated business to benefit Volkswagen’s new car cycle
Event: The company released its 2019 Interim Report: operating income of 64 in the first half of the year.
2 ‰, the ten-year average of 1.
4%; net profit attributable to mother 2.
5 ppm, 10-year average of 4.
Single quarter revenue of 34.
60,000 yuan, ten-year average 1.
5%; net profit attributable to mother in a single quarter1.
4 ‰, the ten-year average of 3.
The company’s performance fluctuated slightly, far better than the industry average in the first half of the domestic automobile market, many of which were sluggish, and the sales volume of passenger cars fluctuated.
9%, the company’s main supporting customer FAW-Volkswagen sales increased by 11.
The company’s revenue and net profit attributable to its mother both only marginally crossed, far better than the industry average.
The consolidated statement business has effectively improved, effectively reducing the declining impact from joint ventures and associates. The investment income in the second quarter of 19 was 1.
Four ten percent, an average of 22 per year.
We believe that in the first half of the year, due to the triple impact of the high base in the same period, the switching of the country’s five countries and six countries in some regions, and the destocking of dealers, the economy was relatively weak.
The industry boom is expected to gradually pick up in the second half of the year. FAW-Volkswagen’s sales under a strong product cycle may increase rapidly. As the pure standard of FAW-Volkswagen’s industrial chain, the company’s subsequent performance attempts to stabilize and rebound.
The lower gross profit margin and lower management expenses brought about improvement in consolidated business. The company’s gross profit margin in the first half of the year8.
5%, an increase of 0 from the previous.
5pct, Q2 gross margin 8.
6%, increasing by 0 every year.
4pct, new orders from FAW-Volkswagen and the substantial improvement in profitability of 杭州夜网论坛 Fuwei Hella, the driving force behind the continued improvement in gross profit margin.
Expense ratio: the company’s total expense ratio in the first half of the year 4.
3%, a decline of 0 per year.
3pct, where the sales expense ratio is 0.
8% (decade +0.
3pct), due to the increase in the provision of the Three Guarantees budget.
Management + R & D expense ratio 3.
5% (one year-0.
6pct), in which management costs are reduced by at least 21%.
The sharp decrease in management expenses is also one of the reasons for the only small fluctuation in the company’s first half performance growth.
On the whole, the company’s gross profit margin has stabilized and rebounded, and is expected to continue to increase with the new car package, and the expense ratio is reasonable and controllable.
Earnings forecast 重庆耍耍网 and investment recommendations We expect the company’s EPS for 2019-2021 to be 0.
95 yuan, 1.
01 yuan, 1.
09 yuan, corresponding to PE is 11.
3 times, 10.
7 times, 9.
Benefiting from the new product cycle of FAW-Volkswagen, we maintain the company’s “Buy” rating.
Risk warning: The domestic automobile market is weaker than expected; FAW-Volkswagen sales are lower than expected.