Xugong Machinery (000425) Semi-annual Report Comment： Performance in line with expected gross profit margin, cash flow improved significantly, parent company mixed reforms stepped up
Xugong Machinery (000425) Semi-annual Report Comment: Performance in line with expected gross profit margin, cash flow improved significantly, parent company mixed reforms stepped up
XCMG released the semi-annual report for 2019: 1) H1 revenue 311.
5.6 billion, previously +30.
12%, net profit attributable to mother 22.
8.3 billion, previously +106.
82%, net of non-return to mother’s net profit 21.
7.9 billion, previously +115.
54%, operating net cash flow 28.
4.1 billion, exceeding the scale of net profit, +45 for the year.
97%; 2) Single-quarter revenue of 167 in the second quarter.
3.7 billion, previously +27.
18%, net profit attributable to mother 12.
3 billion, +110 in ten years.
44%, net of non-return to mother’s net profit12.
3.2 billion, up from +137.
57%, operating cash flow 27.
3.4 billion, exceeding the scale of net profit, +123 per year.
The gross profit margin of cranes bottomed out, and the company continued to maintain the industry’s leading category: the company’s revenue in 2019H1 cranes, pile machinery, and scraping machinery were 114.
7.8 billion, 34.
04 billion, 29.
9.5 billion, the previous growth rate was 33.
83%, gross margins were 24.
24%, twice as much as +3.
65pct, comprehensive gross margin 18.
33%, ten years +0.
99pct, Q2 single quarter gross profit margin of 19.
69%, ten years +2.
99pct, +2 chain.
The initial increase in the gross profit margin of the core product crane is the profit recovery after the second-hand debt machine is cleared.
According to the company’s semi-annual report, the company continued to maintain the height of the crane head in the first half of the year, and the mobile crane market share ranked first in the world. Domestic 100-ton-class large-tonnage mobile cranes replaced half of the country, and 1,000-ton large-scale cranes took the lead in the industry.The market share is over 60%.
Expense control ability is outstanding, cash flow hits a record high, and the balance sheet continues to solidify: the company’s sales expense ratio, management expense ratio, research and development expense ratio, and financial expense ratio were 4 in the first half of the year.45%, 1.
96% and -0.
37%, respectively -0 per year.
61pct, a total reduction of 2.
9pct, further increasing profit elasticity.
Previous operating cash flow of the company28.
A record high of RMB 4.1 billion, and the quality of earnings has increased. At the same time, the company accrued credit impairment losses7.
3.4 billion (increased in accounts receivable + change in accounting policies), asset impairment losses1.
5.3 billion, total 8.
87 trillion, the quality of the balance sheet continued to solidify.
The non-crane 杭州夜生活网 business maintains strong competitiveness, and the international layout is advancing synchronously: the company’s rotary drilling rigs, horizontal directional drilling two-drill products and road graders, road rollers, and pavers have the largest domestic market share; the market share of high-altitude operation vehicles is the same as domesticThe gap in the first place has narrowed; the high-class fire truck ranks first in China.
At the same time, in the first half of the year, the export scale of XCMG brand and the industry’s self-operated exports steadily ranked first in the industry. In Asia-Pacific, Central Asia, and Africa, the market share continued to be the first, and the export share of 35 of the 65 countries along the “Belt and Road”the first.
Excellent product competitiveness and international layout strongly support the company’s performance.
The parent company’s mixed reform is stepped up, and the Group’s asset injection is expected to improve: the existing XCMG’s limited mixed reform work is being implemented in accordance with the plan. The mixed reform promotes the improvement of the company’s operating mechanism, market-oriented selection of personnel, optimization of incentives and constraints, and innovation capabilities.And market competitiveness.
At the same time, the expected increase in the Group’s asset injection expectations. In the first half of the year, the parent company’s respective excavator sales exceeded 20,000 units. The year-on-year growth rate was much higher than the industry growth rate, and its market share ranked among the top two in the domestic industry.
Profit forecast and investment grade: It is estimated that the net profit attributable to mothers will be 4 billion and 50 billion in 2019-2020, corresponding to less than 9 times the current PE. It is continuously recommended and the rating of “Buy” is maintained.
Risk reminder: Downstream investment is less than expected, industry competition is intensified, and raw material prices fluctuate.