Zhejiang Dingli (603338): The results of the third quarter report slightly exceeded our expectations
The 3Q19 performance declined slightly. We expect Zhejiang Dingli1?
3Q19 revenue 14.
4.5 billion, +9.
The year-on-year increase was 0%, and the net profit attributable to the parent company was 4.
4.4 billion, +12.
Increased by 0% year-on-year.
Revenue in the third quarter of 19 5.
97 thousand yuan, +10.
The year-on-year growth was 4%, and the net profit attributable to the parent company was 1.
830,000 yuan, -3.
The year-on-year rate of 9% was slightly lower than our expectations, mainly due to the decrease in the decrease in gross profit margin.
In the third quarter of 19th, revenue grew steadily, but the growth rate of gross profit margin was extended.
In the third quarter of 19 years, the revenue growth rate was 10 in ten years.
At 4%, we estimate that the domestic revenue growth rate is faster than overseas, especially the US market is affected by the Sino-US trade friction and caused a high base in the same period last year, which is estimated to cause a drag on the overall growth rate.
Looking at the first three quarters, we estimate that the scissor slightly overlaps, and the arm type maintains rapid growth.
In terms of gross profit margin, taking into account the imposition of tariffs on U.S. export products, and we estimate that the company’s average discount to the U.S. distributors in the third quarter reached 8
10%, the margin dragged down the gross profit margin.
Gross profit margin fell in the third quarter of 194.
0ppt to 39.
3Q19 gross margin margin increased slightly by 0.
2ppt to 40.
During the period, the expense ratio decreased, investment income decreased, and net profit margin decreased.
In the third quarter of 19, the company’s sales / management (including R & D) / financial expense ratios continued to decline.
2ppt, we estimate that this is mainly due to the increase in scale effect and the company’s ability to reduce costs and control costs.
In 3Q19, investment income decreased by 90% year by year.
5%, mainly due to the sale of financial assets in the third quarter of last year, a long-term equity investment generated long-term investment income generated a high base.
In the last 3 quarters, the 19 net profit margin decreased year by year.
6ppt to 30.
Operating cash flow declines every year.
As of the end of the third quarter, the company’s inventory / receivable balance increased by 2 compared with the beginning of the year.
1 trillion / 46.46 million yuan, the balance of accounts payable decreased by 19.04 million yuan compared with the beginning of the year.
Net cash inflows from operating activities in the third quarter of 192.
72 ppm, a decrease of 1 per year.
The development trend looks forward to the volume of new arm products next year.
The company’s growth in 2019 is facing heavy pressure. Overseas is affected by Sino-US trade friction, while domestic is affected by the impact of new entrants on the market.
Looking forward to 2020, we believe that under the low 北京夜生活网 base of 2019, the drag on the overall growth rate will shift, and the volume of new arm-type products will bring growth elasticity.
And after the new production capacity matures, we predict that the gross profit margin of the arm type will also have a shift to improve, and Zhejiang Dingli’s profit scale is expected to reach another level.
Earnings forecasts and estimates Taking into account the slightly higher-than-expected third quarter report, we lower our EPS for 2019 / 20e.
6% / 9.
7% to 1.
The current sustainable correspondence for 2019 / 20e 40.
2x / 28.
7x price-earnings ratio.
Considering that we have lowered our profit forecast, we have reduced our target price by 9 accordingly.
7% to 76.
74 yuan, corresponding to the target price-earnings ratio of 2020e 35x, with a potential increase 南京夜网 of 21.
Maintain “Outperform” rating.
Risks The volume of new products fell short of expectations, and Sino-US trade frictions escalated.