McGmitter (002851) Interim Commentary: Electric Vehicle Business Explodes and High Growth Continues

McGmitter (002851) Interim Commentary: Electric Vehicle Business Explodes and High Growth Continues
Incident Description The company released its semi-annual report for 2019 and achieved revenue16.US $ 600 million, an annual increase of 61%; net profit attributable to shareholders of the parent company1.6.2 billion, an increase of 148% in ten years.The actual growth rate fell within the air force’s notice interval. Incident Review Revenue continued to grow at a high level and profitability remained stable.The company’s 2019H1 revenue maintained a rapid growth trend, and the main contributing factor was still the electric vehicle business.In terms of profitability, it is expected that the gross profit margin of the company in 2019H1 will decrease by 4 due to the price reduction and structural adjustment of some products.3pct; At the same time, due to the rapid expansion of sales scale, the company’s expense ratio was significantly reduced, and the company’s expense ratio during the 2019H1 period was 14.8%, an improvement of 4 per year.4pct.Taken together, the decline in gross profit margin and the thinning of the expense ratio offset the company’s final profit level. The company’s net profit attributable to shareholders of the parent company increased by 65% in 2019H1, which is basically the same as the revenue growth. The electric vehicle business was one of the main highlights in the first half of the year.In terms of business, the electric vehicle business has been one of the company’s main highlights in the past two 武汉夜生活网 years.The company’s core customer of electric vehicle business is still BAIC. According to the certification data, BAIC’s three main models of A0 and above were produced in the first half of this year.60,000 vehicles, an increase of over 300% in ten years.Under this influence, the company’s new energy and rail transit 2019H1 revenue increased by 239%, and the gross profit margin shifted from position 11.4pct, due to the pressure of price cuts in the industrial chain. Benefiting from high revenue growth, the subsidiary Shenzhen-driven 2019H1 achieved net profit of 0.670,000 yuan. It is expected that the annual performance commitment in the first half of the year has exceeded 90%.Looking ahead, it is expected that the company’s electric vehicle business will continue to grow rapidly, driven by the overall production growth of electric 深圳桑拿网 vehicles in the second half of the year. The continued business growth is still beautiful. Bathroom and automation products are under pressure.Except for electric vehicle products, the company’s other main product operations are slightly differentiated, and most of the majority of its products rely on the development of new markets and new customers, and still maintain a relatively good growth rate; after calculating the three major subsidiaries,The company’s 2019H1 revenue will grow by 38% annually.At the same time, the possibility of a small part of the product growth rate appears: 6pc, Yiyihe Bathroom is expected to complete about 34% of its performance commitments in the first half of the year; it is expected that smart bathrooms will resume growth in the second half of the year driven by the industry peak season, and is expected to achieve performance commitments;Industrial automation products have shown a flat or slight downward trend due to the decline in the overall manufacturing boom since this year. Maintaining the previous point of view, the company’s business line is weakly related to the macro. It is judged that it can maintain rapid growth in the short term with the support of electric vehicles and some electrical products. It is expected that the company’s net profit attributable to shareholders of the parent company in 2019 and 20203.5, 4.600 million, corresponding to PE is 26, 20 times.Maintain BUY rating. Risk Warning: 1. Electric vehicle electric control, intelligent bathroom in the second half of the year fell short of expectations; 2. Increased competition has led to higher-than-expected gross profit margins.