Guanghui Automobile (600297) Annual Report Comments: Expenses Exceed Expected Standing Here Watching Tomorrow

Guanghui Automobile (600297) Annual Report Comments: Expenses Exceed Expected Standing Here Watching Tomorrow

Impairment and exchange rate lowered performance.

The company released its 2018 annual report: operating income reached 1661.

700 million, an increase of 3 per year.

4%; net profit attributable to mother 32.

600 million, down by 16 a year.


The company constantly adjusts its profit structure, and the after-sales and derivative business ironing industry cycle changes.

However, due to the sluggish sales of passenger vehicles, increased promotional costs, foreign exchange losses and asset impairment, the profit increased significantly.

Excluding the impairment 南京桑拿网 of assets and the impact of foreign exchange, the expected growth in profits is basically flat.

Dealers are the first to benefit from the recovery of passenger cars.

Passenger car sales were still sluggish in the first quarter, but could promote the introduction of auto consumption policies, and sales are expected to improve month by month.

Consumption policies are expected to remove barriers to passenger car consumption in many ways, such as liberalizing license restrictions, obsolete old cars, and declining cars. Dealers may usher in a new chapter in weight reduction and empowerment.

At the same time, the industry is in the destocking stage in the first half of 2019, which will help reduce dealers’ burdens.

Auto finance and used cars need to be regulated.

Auto finance originally meant that auto finance companies encouraged consumers to buy cars of this brand in the form of discounts, and dealers supplemented the small profits of car sales through intermediary fees.

The Mercedes-Benz incident will have a certain impact on the auto finance business in the short term, but in the long run, it is trying to force the distributors and automakers to redistribute the benefits.

In this process, large distributors have more channel sales advantages, and their bargaining power is better than that of small and medium-sized distributors, forcing the industry’s concentration and standardization to increase.

The relocation of second-hand cars will continue to be gradually liberalized, which will stimulate the market activity of the auto circulation, and the company’s second-hand car business will grow rapidly.

Investment Strategy.

We estimate that the company’s net profit attributable to mothers in 2019 and 2020 will be US $ 3.5 billion and US $ 3.8 billion, respectively. Currently, the corresponding dynamic forecasts are 13,12 times. Considering that the company’s business climate will continue to rebound in the second half of the year, we give the company a target market value of US $ 54.6 billion.Maintain “Buy” rating.

Risk reminder: Passenger car sales are lower than expected; second-hand cars are subject to restrictions on relocation and suspension.