Shanghai Electromechanical (600835) 2019 Interim Report Review-Gross profit margin for market share is favorable for long-term retrofitting and maintenance and structural highlights
Core point of view The company integrates the operating capabilities of its rivals in the downturn of the industry boom, and the industry gradually moves from incremental to stock. The company follows the market to use market gross margin to convert market share, which is conducive to long-term control and growth in the aftermarket.Maintenance has become a structural highlight, maintaining the “buy” level.
Pressure on gross profit margins led to negative growth in profits.
2019H1 company achieved operating income of 107.
37 ppm, an increase of 4 per year.
15%, realizing net profit attributable to mother 6.
1.1 billion, down 6 a year.
57%, the net profit of non-returned mothers 5 was realized.
86 ‰, a decrease of 9 per year.
53%, of which single-quarter and second-quarter operating income and net profit attributable to mothers were 64.
70 and 3.
76 trillion, +2 each year.
26% and -9.
The company’s overall gross profit margin was reported as 16.
69%, compared with 20 of the previous year.
00% formaldehyde 3.
31 cases are the core reason why the pressure on the profit side of the company is greater than the revenue side.
The company has four expense ratios of 7.
82%, compared with 8 of the previous year.
84% continued to optimize, reflecting the company’s consistent excellent operating ability in this round of elevator boom transformation.
Report overall operating cash flow-8.
6.6 billion, down from -3 in the same period last year.
At $ 61 trillion, debt for consolidated contracts is reduced by 4 per year.
14% to 147.
17 billion U.S. dollars, this change may be related to the real estate developer’s funding pressure caused by the advance receipt ratio and payment timing changes.
In the fierce industry, securing market share is extremely beneficial to the long-term, and the old retrofitting / installation / post-market performance has become a bright spot.
The report summarizes that the operating income and net profit of Shanghai Mitsubishi Elevator, a holding subsidiary, was 101.
5.2 billion and 6.
8.4 billion, each year +4.
97% and -22.
37%. In addition to the price reduction of elevators, the pressure on gross profit margin may also be related to changes in income structure such as maintenance and lower Mitsubishi channel fees, which are gradually reduced. It is expected to continue to maintain a positive growth of 5% -10%.In the process of gradually moving from stock to stock, we believe that the company chooses to follow the market and use the gross profit margin in exchange for market share increase is a more conducive long-term choice.
Taking into account the fierce price competition in the 18H2 industry, the gross profit margin of the 19H1 industry has improved, and the pressure on the cost side of the 19H2 industry has gradually eased, and the performance on the profit side may have improved to some extent.
In addition to the new elevator market, the renovation of old elevators and the retrofitting of old houses have performed well. As of the end of 2018, the number of domestic elevators in use exceeded 6 million units. The space for retrofitting is huge.Based on growth of more than 30%.
The reported company’s installation and maintenance income exceeded 32 billion yuan, accounting for more than 32% of revenue (28% and 30% in 2017 and 18 respectively), and continued to realize the market’s growth logic after the realization.
Investment income promoted steady growth.
Nabo Precision successfully achieved a production capacity layout of 200,000 units in 2018, and achieved a profit improvement of 550,000 yuan in the first half of the year, or it may be disturbed by the short-term demand for robots, but its long-term competitiveness is outstanding.
In addition, Jintai Engineering and Hydraulic & Pneumatic businesses benefited from the high prosperity of construction machinery, and their profits increased by 18 respectively.
02% and 36.58%. The remaining Carrier Air Conditioners, 南京龙凤网 ABB Motors, Marathon Leather, and UFIDA have a stable profit margin. The overall investment income is expected to increase steadily.
Risk factors: The decline in sales of real estate drags down the elevator’s main business; the sales and profitability of the RV reducer business fall short of expectations; the uncertainty of state-owned enterprise reform policies; the uncertainty of non-recurring returns and other risks.
Investment suggestion: The company ‘s gross profit margin will be affected by the price war in the industry in the short term. The downward pressure on prices has eased at the beginning of the year. In addition to the new elevators, the old-side reforms, retrofitting, and maintenance after the maintenance of the market have become the driving force for the elevator business growth.Shanghai State Reform 重庆耍耍网 has outstanding benchmarking capabilities and is expected to continue to gain market share.
We maintain the company in 2019-21-13.
2.1 billion, 14.
06 million net profit forecast, maintain “Buy” rating.