Zhongding shares (000887): short-term performance under pressure from overseas acquisitions into the integrated harvest period

A brief evaluation of the results The company announced the first quarter of 2019 report, realizing revenue in Q1 2019, net profit attributable to mothers and net profit attributable to non-mothers were 26 respectively.

5.7 billion, 3.

09 billion, 2.

9.5 billion, -12 each year.

6%, -18.

0%, -17.


The EPS is 0.

25 yuan.

  Short-term pressure on operating analysis performance.

(1) Due to the downturn in the automobile market, the company’s 2019Q1 revenue decline continued to fall by 13%, product prices were under pressure, and the overall gross profit margin fell by 0 compared with the same period last year.

4 points to 28.

2%, short-term performance is under pressure. It is expected that the inventory removal with the car industry is completed, and the company’s revenue is expected to improve sequentially.

(2) The sales / management / R & D / financial expense ratios are 3 respectively.

6% / 4.

1% / 4.

6% / 1.

5%, compared to 13.

4% rose to 0.

3pct, most stable.

(3) Net cash flow from operating activities increased year-on-year.

5% to 2.


(4) The ending inventory increased by 7% to 2.2 billion U.S. dollars per year.

  China’s No. 1 non-tire rubber leader, actively deploying new energy vehicles.

The company is an absolute leader in the domestic non-tire rubber parts industry. In 2018, its revenue ranked 13th among global non-tire rubber parts companies and No. 1 in China.

The business covers four areas of noise reduction and vibration reduction systems, sealing systems, cooling systems, air suspension and motor systems, and many are stable.

In addition, the company has deployed new energy fields such as battery cooling systems, motor seals, battery mold seals, and battery motor vibration reduction and noise reduction to achieve 1.2 billion revenues in 2018.

  Overseas acquisitions have entered the integration harvest period and are optimistic about the long-term effects of business synergy.

Since 2008, the company has continued to make overseas acquisitions, and the overseas companies it has acquired are now making steady profits.

Among them, the noise reduction and vibration reduction business of Anhui Weigu increased revenue by 183%; the sealing system business acquired Cooper, and KACO was awarded oil seal and water seal technology, and was awarded a Tesla order.Suzhou, supplier of upgraded runway assembly; acquired mid- and high-end car supplier AMK in the air suspension and motor business, and landed in Anhui factory.

  Profit adjustment and investment recommendations In the context of the downturn in the auto market, the profit forecast for 2019 is reduced by 7%, and the company’s net profit attributable to mothers in 2019-2021 is expected to be 11 respectively.



800,000 yuan, the corresponding EPS is 0.


21 yuan.
Reduce company target price by 7% to 1上海夜网论坛3.

95 yuan, corresponding to 15x PE in 2019, maintain “Buy” rating.

  Risks suggest that raw material rubber prices fluctuate; the growth rate of domestic automobile sales slows down; the growth of new energy vehicle production and sales falls short of expectations; the trade war affects tariffs and trade.