Kangli Elevator (002367): Beneficial industry is getting better
Event: The company released the 2019 semi-annual performance forecast. It is estimated that the net profit attributable to shareholders of listed companies in the first half of 2019 will be 9,730.
50,000 yuan, an increase of 140% -160% in ten years.
Core views: ① The acceleration of real estate construction drives the elevator output beyond expectations, the elevator industry is booming, the company’s revenue scale has increased significantly and the profit level has increased, and the company’s net profit growth in 2019H1 will increase; considering that the acceleration of real estate construction will inevitably drive the real estate completed area data to improve,We judge that the elevator sales data is gradually reflected in the good follow-up, and the company’s high growth performance is highly certain.
② In the medium and long term, there is a huge market for retrofitting elevators in old buildings in developing countries. The State Council will speed up the renovation of old towns in cities and towns and will inevitably accelerate the outbreak of retrofitting elevators in old buildings. At the same time, it will consider upgrading, shantytown renovation, and rail transit.The demand for elevators in traditional real estate and other fields, the demand for elevators in Croatia continues to increase rapidly.
The company binds strategic large customers with overlapping tracks and escalators business, which has made rapid progress, and the foundation for growth has been gradually consolidated.
The growth in revenue has increased significantly, and the profit level has resumed. The company’s net profit increased in the first half of 2019.
① The net profit attributable to shareholders of listed companies in the first half of 2019 was 9,730.
05 million US dollars, a year-on-year increase of 140% -160%. It is estimated that the amount of non-recurring gains and losses on net profit will be about 29.22 million yuan, and the increase in net profit after deduction is even more significant.
② The company ‘s net profit has grown from growth to revenue growth and net profit margins have increased: On the revenue side, the elevator industry ‘s prosperity has gradually improved, and the conversion rate of on-hand orders has gradually improved. The company ‘s operating income in the first half of the year has increased by approximately 17%; in terms of profitability, it has controlled product sales in the previous periodThe expected growth effect of falling prices, the reasonable increase in the prices of raw materials, the increase in gross profit margin, and the decrease in sales expenses year-on-year compared to 2018, thereby improving the company’s net profit level.
The elevator industry boom degree logic was verified logically, and some elevator industries entered the upward phase.
① In “Finding the Boom Point and Relative Certainty-The Annual Investment Strategy for the Machinery Industry 2019” released on December 26, 2018, we took the lead to point out that the boom point of the elevator industry has appeared.
The acceleration of real estate construction in 2019 will drive the increase in elevator output. In May 2019, domestic elevators, escalators and elevators increased their output by 14%.
30%, 1-May incremental crops increase by 17 per second.
00%, both single month and cumulative output growth exceeded market expectations, verifying our judgment that 2018 will be the turning point of the elevator industry.
② Taking into account the acceleration of land construction in 2019, it will inevitably lead to the improvement of the data on the area of completed land projects. We judge that the elevator sales data will gradually change and become better, and the cost of beneficiary raw materials will decrease. Elevator companies will usher in profit repair.
③ In the medium and long term, the demand for retrofitting elevators in old buildings is conservatively estimated to exceed 1 million units, and the market size is more than 500 billion. On June 19, 2019, the National People ‘s Congress will accelerate the transformation of towns in accordance with the Central Economic Work Conference and the “Government Work Report”Working in old neighborhoods will inevitably accelerate the outbreak of the elevator market for retrofitting old buildings. At the same time, consideration will be given to upgrades, shantytown renovations, rail transit, traditional real estate and other areas. Demand for elevators will continue to increase.
Continuously binding strategic large customers with overlapping tracks and escalators business has made rapid progress, and the company’s growth foundation has been gradually consolidated.
① In a fiercely competitive environment, the major customer for development strategy is the development strategy formulated by the company. At present, the company has cooperated with Country Garden, Changfeng Real Estate, Rongsheng Real Estate, Ocean Real Estate, Hailiang Real Estate, Zhengshang Real Estate, and HelensburgEstablish a long-term strategic cooperative relationship, which will bring incremental income to the company in the future.
② In 2016, the company began to focus on the rail transit escalator market and achieved significant results. In 2018, the company repeatedly won bids for domestic rail transit elevator projects and competed with foreign brands. In 2018, the company’s new expenditure on rail transit escalators exceeded 600 million yuan.In 2019, it is expected to exceed 1 billion. Through the gap between the company’s high-end escalator products and famous foreign brands, the company’s competition in the field of rail transit escalators will continue to increase, and the rail transit escalator business is expected to become the company’s largest revenue growth point.
Investment suggestion: We expect the company’s net profit for 2019-2021 to be 2 respectively.
5.6 billion yuan, with annual growth rates of 1730% and 34 respectively.
88%, corresponding EPS is 0.
57 yuan, corresponding to 22 for PE.
Maintain the company’s “Highly Recommended” investment rating.
Risk warning: The real estate completed area is less than expected, and fierce competition in the industry has led to further declines in elevator prices, and steel prices have fallen more than expected.