Jiangling Motors (000550): Focusing on Light Commercial Vehicles’ Strong Balance Sheet

Jiangling Motors (000550): Focusing on Light Commercial Vehicles’ Strong Balance Sheet

1H19 results are in line with 上海夜网论坛 market expectations. Jiangling Motors announced 1H19 results: revenue of 137.

20,000 yuan, the average ten years 3.

9%; net profit attributable to mother is 58.86 million yuan, with an annual extension of 82.

6%.

The company’s 2Q19 revenue was 72.

20,000 yuan, a ten-year average of 7.

6%, an increase of 10 from the previous month.

9%; net profit attributable to mother is 33.7 million yuan, which is extended by 79 per year.

6%, an increase of 34.

0%.

Meet the performance forecast issued by the company’s air force.

Development trend The cash flow optimization is obvious and the balance sheet is strong.

The company’s operating efficiency improved in the first half of the year, and its upstream and downstream premium capabilities increased. The company’s accounts receivable and inventory decreased by 7 compared 南宁桑拿 with the end of the year.

200 million, 3.

500 million, while coping increased by 2.

20,000 yuan, increasing the company’s operating cash flow by 15.

400 million to 14.

400 million, compared with a net decrease of 1.
.

0 million.

Monetary funds on the company’s account increased by 7 compared with the beginning of the year.

7 ppm to 83.

9 trillion, the interest-bearing impedance remains extremely low, and the company’s balance sheet continues to be strong.

High expenses during the period dragged down profits, and government subsidies increased significantly.

The total period expenses of the 2Q company are the same, which is an increase of 3 from the previous month.

6ppt, 1.

9ppt to 14.

7%, which is a drag on the company’s profit competitiveness. The main part of the increase comes from the fees of the listed market and the use of trademarks.

Can improve the gross margin after the launch of the collar to a certain extent (the overall gross margin is the same, an increase of 1.
.

3ppt, 1.

9ppt to 15.

8%), but correspondingly also added additional costs. In summary, at this stage, the contribution to corporate profits is still uncertain.

The company’s 2Q19 subsidies (especially research and development related subsidies) increased to 6,041 million in real terms, which became the key to positive earnings.

The product structure still needs to be adjusted, and internal improvements promote efficiency.

We believe that in the current fierce market competition, especially in the increasingly intense SUV Red Sea environment, the company’s products should focus on light commercial vehicles in its traditional strengths, improve and select profitable businesses, clean up inefficient or reduce assets, and revitalize overall profitability.

In the first half of the year, the company’s internal management also actively improved efficiency, and employee compensation expenses increased by 11% to 12 per year.

500 million, or will effectively motivate employees to improve overall management efficiency.
Earnings Forecast and Estimates Due to the high expense ratio, the non-net profit deduction is lower than our expectation. We lower the net profit for 2019/202049.

3% / 36.
3% to 1.

40 ppm / 3.

6.6 billion.

The current company complies with the corresponding 2019/20201.

3 times / 1.

3 times price-to-book ratio.

Maintain Neutral rating. We believe the company’s balance sheet is strong and cash is abundant, but there is still uncertainty about profitability. The company estimates it will be at 1.

3-1.

Near the 4x price-earnings ratio, we cut our target price by 21.

0% to 16.

60 yuan corresponds to 1.

4 times / 1.

4 times the 2019/2020 P / B ratio, which is 3 last year.

9% upside.

Risk product adjustments were lower than expected.

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