Xugong Machinery (000425) Company Comments: Semi-annual report meets expectations State-owned enterprise reform + science and technology board catalysis
XCMG issued a semi-annual report, predicting that net profit attributable to mothers will be 2.1 billion to 2.4 billion in H1 2019, an increase of 90%.
39%, corresponding to Q2 net profit of 10.
4.7 billion, an annual increase of 80% -130%.
The company’s performance as a whole is in line with expectations. The high growth is mainly due to the continued high prosperity of the construction machinery industry, the company’s core product sales growth, and internal management capabilities.
January-April truck crane sales hit a new high for the same period, and the boom is expected to continue until 2021 1) A large number of equipment sold in 2010-2011 will usher in a centralized update, which is expected to continue until 2021, and at the same time the national standard switches to the 2019H2-2020 update rhythm trendAccelerate; 2) The growth rate of real estate investment is stable, but the construction and construction investment at the construction end has rebounded to the bottom, generating a lot of demand for cranes and tower cranes; 3) Demand continues to sink, and the rural market has increased its contribution, and small tonnage truck crane sales have grown rapidly4) Local government special bonds allow the provision of capital for major projects, and the rapid growth of infrastructure investment continues to rise, supporting the sales of construction machinery.
The company’s crane sales have grown rapidly, and the gross profit margin is expected to bottom out. 1) The company’s truck 天津夜网 crane sales were 7080 units in January-April, a gradual increase of 45.
5%, the market share is 40.
3%, ranking first in the industry; truck-mounted crane sales of 3686 units, an increase of 21.
7%, with a market share of 53.
8%, located in the territory of absolute sovereignty; sales of 374 crawler cranes, an increase of 36.
5%, with a market share of 41.
3%, ranking the forefront of the industry; 2) The company actively lays out environmental protection industries, high-altitude platforms, underground space construction and other industry sectors to create new advantageous industries and explore new performance growth points; 3) The company’s Q1 gross profit margin is at historically low levels, we judgeThe first is the change in the sales structure and the company’s handling of the second mobile phone. With the second mobile phone cleared, some raw materials prices fell, and crane funding for jobs, the gross profit margin tried to bottom out.
State-owned enterprise reform + science and technology innovation board is expected to land one after another, and follow-up catalysts are continuously reported according to the Voice of China “News and Updates”. By the end of this year, XCMG will complete the reform of mixed ownership.Privately-invested diversified enterprises in the field of construction machinery are expected to be listed in 2-3 years.
At the same time, XCMG, a subsidiary of the Industrial Internet, will also land on the Science and Technology Innovation Board within two years.
Profit forecast and investment rating: It is estimated that the company’s net profit attributable to the parent from 2019 to 2020 will be 4 billion and 50 billion, with annual growth rates of 96% and 25%, respectively, and the corresponding EPS will be 0.
51 yuan and 0.
64 yuan, the current PE is limited to 9.
5 times, continue to focus on, maintain “Buy” rating.
Risk reminder: Infrastructure investment growth is slower than expected, industry competition is intensified, raw material prices are volatile, and company product sales are lower than expected.