Depth-Company-Kaizhong Co., Ltd. (603037): Short-term revenue, extended performance, pressure on product line expansion, promising

Depth * Company * Kaizhong (603037): Short-term revenue extension results pressure product line expansion prospects are promising

The company released its 2019 Interim Report, which achieved operating income for the first half of the year2.

600 million, down 10 a year.

6%; net profit attributable to shareholders of the listed company is 0.

600 million, down 24 a year.

6%; budget benefit 0.

57 yuan.

Among them Q2 realized operating income1.

200 million, down 13 each year.

2%; net profit attributable to shareholders of the listed company is 0.

200 million, down 45 a year.


Affected by the sluggish sales volume of the automotive industry, the industry improved in the first half of the year but still showed continued industry. The gross profit margin fell, the profit margin increased, and the performance was slightly lower than expected.

The market share of the company’s buffer blocks and other products has continued to increase, and new products for electronic control systems have progressed smoothly, with promising development prospects.

Affected by the sluggish sales volume in the industry, we have lowered our profit forecast and expect the company’s earnings to be 1 in 2019-2021.

21 yuan, 1.

57 yuan and 1.

97 yuan, maintain BUY rating.

Highlights of support levels Revenue increased slightly in the first half of the year, and gross profit margins fell under pressure.

In the first half of the year, domestic passenger car production and sales dropped by 15 respectively.

8%, 14.

0%, affected by this, the company’s revenue fell by 10.

6%, but performance is still industry.

Gross profit margin was 40 in the first half.

8%, down 4 each year.

3pct is expected to be due to lower sales and lower prices.

In terms of expenses, selling expenses decreased by 15.

8%, mainly due to the decline in sales scale; management expenses increased by 7.

1%, mainly due to the increase in staff costs; R & D costs increased by 8.

6%, mainly due to increased research and development investment in new materials such as shock absorption; financial expenses increased by 7.

7%, mainly due to the decrease in exchange gains; four expense ratios of 16.

0%, a slight increase from the previous one.

6 points.

Gross margin budget expense ratio increased, so net profit fell by 24.

6%, the decline is greater than income.

Among them Q2 income fell by 13.

2%, gross profit margin decreased by 4.

9pct, management, R & D and financial expenses increased and government subsidies decreased compared to the same period last year, resulting in a 45% decrease in net profit.

3%.With the gradual recovery of automobile sales, the company’s revenue is expected to resume growth, and gross profit margin is expected to stabilize and rise.

Market share continues to increase and customers continue to expand.

The decline in the company’s revenue in the first half of the year was lower than the decline in passenger car output by 5.

2pct, it is expected that the company’s market share of buffer blocks and other products will continue to increase.

Car sales are declining, pressure is increasing, and the company is expected to surpass its cost-effective advantages and gradually increase its market share.

In terms of shock-absorbing components, the company has won a number of projects including Audi (Germany), FAW-Volkswagen, SAIC-Volkswagen, Changan Ford and achieved breakthroughs in Korean projects.

In terms of lightweight pedals, in addition to SAIC, Geely, Chery and Weimar pedals have been supplied in batches, and have received project orders from BAIC New Energy and Jiangling New Energy.

The market share continues to increase, customers continue to expand, and the company’s development prospects are promising.

The customer base is good, and product line expansion is expected to bring performance 杭州夜网论坛 flexibility.

The company has a broad market base, and its customer base basically covers domestic mainstream vehicle companies.

The company’s existing product bike value indicator (bike value buffer block is about 40 yuan, lightweight pedal 50-200 yuan), the expansion of the product line significantly enhances the market space and brings performance flexibility to the company.

The development of new products for the company’s electronic control system is progressing smoothly, and mass production in the future is expected to promote high-speed growth of the company’s performance.

It is estimated that we have lowered our profit forecast. It is expected that the company’s earnings for 2019-2021 will be 1.

21 yuan, 1.

57 yuan and 1.

97 yuan (previous forecast was 1.

46 yuan, 1.

91 yuan and 2.

40 yuan), due 苏州桑拿网 to the gradual increase in market share of products such as buffer blocks, new products of electronic control systems are expected to bring breakthrough flexibility and maintain a buy rating.

The main risks faced by the rating are 1) the continued decline in car sales; 2) the shock absorption and pedal business development is worse than expected.