Hengli Hydraulics (601100): The road to the top is clearly identified and is expected to enter the foreign supply system and usher in a space revaluation
Event: Recently, the China Construction Machinery Industry Association released November excavator sales data. In November, it sold more than 19,000 excavator products of various types, an increase of about 22%; instead, the Ministry of Finance issued some new additions in 2020 in advance.Special debt, fixed-asset investment project capital reductions, etc. are frequent, and the release of the country’s counter-cyclical tools provides support for demand; we believe that the broad space that Hengli faces in the future has a very clear growth path.
Core view The company’s future space is clear and the growth path is determined. For Hengli, the company’s future growth space is still broad (internal) and the changes are clear. The company’s road to the above space has also been consolidated. Hengli’s growth direction is clear and determined; ,,, (1) As domestic OEMs continue to compete in large-tonnage products; the industry chain’s determination to “domesticize” is irreversible; (2) historically, the company has been increasing its product power faster and its capabilitiesOutstanding; (3) The scale effect is still in progress, and the company’s profitability is still being promoted; we believe that in the current clear future and route, Hengli is trying to run a better transformation; it is expected to enter the overseas leading supply system and market developmentMarket space is re-evaluated; at present, foreign leaders are facing challenging pressures in terms of price, cost, and share; (1) in the traditional advantage category, products of medium and large tonnage have been breached by Sany; and (2) small digging is of equal qualityChemical products, foreign countries lose money and lose in total; (3) The long-term association between foreign OEMs and foreign parts manufacturers has reached or has come to an end.We believe that under the multiple pressures mentioned above, cost reduction, price reduction, and more business means to seize the share are the primary issues for communication thinking; therefore, Hengli promoted the breakthrough of small-scale pump valves and entered a large number of supply systems. After entering the overseas system,Market prospects re-evaluated the company’s space; profit growth was driven by revenue and asset quality improved; the company achieved operating income of 38 in the first three quarters.
34 ppm, an increase of 21 in ten years.
3%; realized net profit attributable to mother 9.
1.7 billion, an annual increase of 27.
The profit growth rate is faster than the revenue growth rate; Hengli’s operational management capabilities are very good. Against the background of the increase in the proportion of R & D investment, the overall rate of decline has dropped by 0.
About 8pct; the quality of the company’s cash flow assets is on the rise; financial forecasts and investment recommendations: data provided by downstream excavators and prosperity are still better, we forecast the company’s earnings per share in 19-21 is 1.
98 yuan (original value 1 in 19/20).
62 yuan), based on the company’s historical valuation level in the past 30 months, we believe 合肥夜网 that the current company’s reasonable estimate is 39 times the price-earnings ratio in 2019, and the corresponding target price is 54.
21 yuan, maintain BUY rating.
Risk reminder: risk of exchange rate fluctuations, risks of economic operation fluctuations, etc .;