Hengli Hydraulics (601100) Quarterly Report Comments: Demand for Hydraulic Parts in the Third Quarter Continues to Increase Market Share

Core point of view: The company released the third quarter report of 2019, and achieved operating income of 38 in the first three quarters.

34 ppm, an increase of 21 in ten years.

32%, realizing net profit attributable to mother 9.

170,000 yuan, an increase of 27 in ten years.

49%.

The industry boom recovered in the third quarter, and the company’s operating conditions continued to be stable. According to data from the Construction Machinery Industry Association, domestic sales of excavators bottomed out in May this year. After June, the growth rate picked up month 南宁桑拿 after month.Demand continued to recover in the third quarter, and domestic excavator sales growth rates were 11% / 19 in July-September.

46% / 17.

83%.

Hengli’s overall revenue Q3 increased slightly around Q2, with a single quarter net profit growth of -3.

73%, we think the reason may be that the financial settlement is relatively lagging, and at the same time the single-quarter profit base rose in the last three quarters of last year.

From the perspective of profitability, the company’s profitability in the third quarter continued to maintain a relatively high level, with single quarter gross margin / net margin levels of 35.

26% and 23.

70%.

The volume of hydraulic products continued to increase, and the number of medium and large digging pump valves and small digging pump valves continued to increase. 杭州桑拿网 Since the year, the company’s hydraulic pump valve products have continued to be recognized by downstream customers.Improve faster.

Zonda Pump Valves has gradually been introduced to customers this year and has formed a stable supply capacity.

At the same time, the company also developed new products for rotary motors, which penetrated into two adjacent products at the same time.

The growth of hydraulic pump valves has brought important marginal contributions to the company’s revenue growth in 2019.

The good competitiveness of the company’s hydraulic pump and valve products has been recognized and inspected by downstream customers. In the future, it will work hard to enter the supply system of well-known excavator brands in the world.

As the company’s second phase of the foundry project is put into production, the integrated hydraulic parts business forms continuous support.

Investment suggestion: The company is expected to achieve operating income of 54 in 19-21.

94/65.

90/70.

99 ppm and EPS are 1.

40/1.

70/1.

83 yuan / share.

The company is a leading domestic manufacturer of hydraulic parts. It constantly expands new customers through new product extensions, and the industry’s competitiveness continues to strengthen. Comparable companies in the same industry have estimated PE at 30x in 19 years. We give the company 30x PE at 19 years. The company’s reasonable value is about 42.

00 yuan / share, we continue to give the company a “buy” rating.

Risk reminder: The demand of the downstream engineering machinery industry decreases; the demand for new pump and valve products is less than expected; the intensified competition in the industry leads to the decline in gross profit margin; the company’s capacity release is less than expected.