Desaixiwei (002920): Improved gross profit margin continued to advance smart network business

Desaixiwei (002920): Improved gross profit margin continued to advance smart network business

The core view performance is in line with expectations.

The first three quarters achieved operating income of 35.

46 ‰, the average level ten years ago.

7%, to achieve net profit attributable to mother 1.

43 ‰, 57 years average.

8%, deducting non-returned mother’s net profit of 58.1 million yuan, an annual extension of 80.

1%, EPS is 0.

26 yuan.

Realized operating income 杭州桑拿 in the third quarter12.

74 million, an increase of 0 from the previous month.

5%, an annual increase of 6.

1%, the growth rate improved by 19.

2 units; net profit attributable to mothers is RMB 40.5 million, which is extended by 21% each year and narrowed by 32.

6 averages; 3 quarters of performance improved significantly.

Net profit growth in the first three quarters was lower than revenue growth mainly due to lower gross profit margins and increased expense ratios during the period.

Gross margin improved in the third quarter, and R & D continued to be spent.

The company’s gross profit margin for the first three quarters was 22.

8%, down 2 every year.

3 averages, of which the gross profit margin was 24 in 3 quarters.

1%, increasing by 0 every year.

6 units, an increase of 0 from the previous month.

9 levels, profitability improved.

Expenses during the first three quarters were 20.

0%, an increase of 4.

8 units; the company’s R & D expenditure continued, and the R & D expenses increased by more than 15%, leading to an increase in the rate of R & D expenses3.

2 units; net cash flow from operating activities in the first three quarters was 1.

73 ‰, a ten-year average of 76.

6%.

The company’s inventory at the end of the third quarter was 8.

53 trillion, an increase of 25 earlier.

1%.

Continue to promote new business of intelligent network connection.

From the perspective of sales volume of downstream customers in the third quarter, FAW-Volkswagen increased by 4 each year.

2%, Great Wall Motor increased by 12 in ten years.

4%, SAIC-GM-Wuling scale narrowed by 19.

3 units; improvement in sales of downstream customers drove the company’s profitability improvement.

The company continues to promote the development of new business of intelligent network connectivity. In the field of intelligent cockpit, the company has won multiple orders for multi-screen interactive intelligent cockpit projects. Four-screen interactive intelligent driving products will be mass-produced on the ideal automatic; in the field of intelligent driving, the companyHD surround view system, automatic parking system, T-Box products and other projects have been mass-produced, V2X products will be mass-produced in 2020; in the field of car networking, the company has obtained FAW-VW, Chery Jaguar Land Rover, Changan MazdaCustomer projects.

With the overall stability and recovery of the industry and the company’s active promotion of new business development, future performance is expected to improve further. Financial forecast and investment advice: Affected by the overall growth of the industry, the downstream customer supporting volume is expected to adjust the revenue and gross profit margin. It is expected that the EPS for 2019-2021 will be 0.

42, 0.

66, 0.

84 (formerly 0.

75, 0.

99, 1.

22 yuan). Comparable companies are automotive electronics and parts related companies. Comparable companies have an average PE assessment of 40 times in 2020, giving them a valuation of 40 times in 2020 with a target price of 26.

4 yuan, maintain BUY rating.

Risk Warning: The amount of vehicle entertainment system, vehicle information system and driving information system is lower than expected, and the revenues of connected car, LCD display and ADAS business are lower than expected, and the passenger car industry demand exceeds expectations.