Hengli Hydraulics (601100) Third Quarterly Report Comment： New Business with Achievements in Basic Performance
Hengli Hydraulics (601100) Third Quarterly Report Comment: New Business with Achievements in Basic Performance
Event: The company released three quarterly reports and achieved revenue of 38 in the first three quarters of 2019.
34 ppm, an increase of 21 in ten years.
32%; net profit attributable to mother 9 was achieved.
170,000 yuan, an increase of 27 in ten years.
49%, basically in line with expectations.
In the third quarter, the pump and valve business maintained a high growth. The excavator cylinder was affected by the destocking of the main engine factory. In the third quarter, it achieved revenue of 10%.
4 trillion, +4 a year.
5%; net profit attributable to mother 2.
5 ‰, at least -3.
Among them, the revenue of hydraulic technology has increased, while the revenue of excavator cylinders has declined slightly.
The decrease in the revenue of excavator cylinders was mainly due to the overdraft of goods initially prepared by the main engine factory, and the main engine factory’s destocking affected the company’s sales confirmation in July-August.
However, judging from the August-October production schedule of the excavator cylinders, it is basically a double exponential growth. We judge that the performance of the excavator cylinders will be released normally in the fourth quarter, and the company’s overall performance will return to high growth.
The profitability is affected by the product structure. The operating quality remains stable. The company’s gross profit margin for the first three quarters was 36.
55%, ten years +0.
68pct, net interest rate 23.
96%, ten years +1.
Q3 gross profit margin was 35.
3%, at least -3.
4pct, net interest rate 23.
7%, -2 pct a year.
The highest single-quarter profit was 南京夜网论坛 mainly due to the off-season shift in the gross profit margin of the excavator cylinders and the increase in the proportion of the pump and valve business with relatively low gross profit margins.
With the release of excavator cylinder performance in the fourth quarter and the increase in gross profit margin brought about by the scale effect of pump and valve products, the company’s profitability will reach a new level.
Net cash flow from operating activities in the third quarter alone was 3.
800 million, previously + 111%, the company’s operating quality continued to remain stable.
The rise of new businesses such as pumps, valves, and motors replicates the successful path of oil cylinders. It is expected to “rebuild” a Hengli company’s oil cylinders in mainstream excavator companies such as Sany, Carter (Global), Xugong, Liugong, etc., all approaching or exceeding 50%.
In 2018, the company’s cylinder business revenue was nearly 30 billion, accounting for 70% of total operating revenue.
In addition, the company’s non-standard cylinders have obvious advantages and are a stabilizer of the company’s revenue. The non-standard cylinders’ revenue has increased at a compound rate of 21 in the past decade.
The success of the cylinders started the company’s customer base with the rise of the company’s pump valves.
The company’s total investment in pump and valve business exceeds 2 billion yuan.
The hydraulic pump valve market is much broader, and its value is about twice that of oil cylinders. It is the main battlefield for high-end products of global hydraulic giants.
The company’s pump and valve products have been initially tested and approved by the market.
We believe that in the next three years, the company’s pump and valve products are expected to replicate the successful path of the oil cylinder, and the profit contribution is expected to approach or even exceed the oil cylinder plate, “rebuilding” a Hengli hydraulic.
Investment advice and profit forecast are expected to achieve revenue of 52 in 2019-2021.
16/79.420,000 yuan, the net profit attributable to shareholders of the parent company was 12 respectively.
3.8 billion, corresponding to 28, 21 and 17 times the current PE.
Considering the vast import substitution space of the hydraulic parts industry and the company’s leading position as a core asset, the company maintains a “Buy” rating.
Risks suggest that the downstream industry is weaker than expected, new product expansion is weaker than expected, and overseas market risks.