Zhejiang Dingli (603338): Uncertainty in trade war weakens company busy shipping season
Core point of view: The uncertainty of the trade war is weakening. At present, domestic and foreign demand is still improving. The company is actively preparing for production, full production scheduling, and busy shipping in the peak season.
The fourth phase of the plant that has been scheduled to increase investment has been completed, waiting for the equipment to be moved in. It is expected to start production early next year. The new arm products are being tried out for foreign customers.
At present, the revenue of arm-type products accounts for about 10%, and the benchmark for foreign leading enterprises’ arm-type revenue accounts for about 40%. We judge that the company will release and release the production capacity of arm-type products.At the same time, the gross profit margin will continue to rise. Arm-type products are expected to become the company’s new profit growth point, and continue to be optimistic about stability!
Uncertainty in the trade war has weakened, and overseas demand is still better.
On March 2, the Treasury Department of the Treasury issued a document. The Office of the United States Trade Representative announced that the trade war tax rate will continue to remain at 10% and will not be increased to 25%. The uncertainty of the trade war will temporarily weaken.Goods are busy!
The company’s sales in the first three quarters of 2018 totaled 2.
10,000 units, sales of about 1 in 2017.
70,000 units, the first three quarters of sales have exceeded last year, high sales growth indicates that downstream demand is still relatively strong.
The rise in prices of foreign products has made the company’s products more cost-effective.
For foreign brands such as JLG and Gini, due to the third-party supply of parts and components, the self-supply rate is low. After the price of raw materials has risen, the cost pressure has increased, and products have to rise in price. Has it risen 3% in early 2019?
At 5%, Zhejiang Dingli has a high rate of self-made parts, cost control is in place, and the cost performance of the product is more obvious.
Although more and more companies are deploying aerial platform products and the market competition has intensified and intensified, the company has always adhered to occupying the market with quality. Therefore, although the company’s products have increased and prices have not risen, they have not faced fierce competition.Will adopt a price reduction strategy, stricter sales policies, high-quality customers, and very good repayment!
The Q1 performance in 2018 was affected by the reduction of the exchange rate, the suspension of orders, etc., and the unfavorable factors of Q1 in 2019 were 杭州夜网论坛 unfavorable. It is expected that Q1 performance will be good.
In the first quarter of 2018, due to foreign exchange losses, suspension orders, etc., the company’s net profit attributable to its mother increased by only 4.
38%, radix constant.
In the first quarter of 2019, the exchange rate has improved, and the current trade war has not worsened, and adverse factors have decreased. We expect that the growth rate of the first quarter of 2019 will be good.
The company has released the 2018 performance forecast, and it is expected that the net profit attributable to mothers will be achieved in 20185.
10,000 yuan, a year-on-year increase of about 77%, in line with market expectations, and the performance is always excellent.
The company’s focus in 2019 is to control costs, strengthen management, and constantly explore new customers. We judge the company’s 2019 performance to continue to maintain high growth.
With strong domestic and foreign demand, arm-type products are expected to become new bright spots.
① Domestic demand is strong, and the domestic market has a bright future.
From an industry perspective, domestic and foreign demand remains strong.
According to the analysis of Terex’s annual report, from 2018 to 2020, the global aerial work platform market will benefit from the replacement and demand will start a new growth cycle. The domestic market is currently in a growth phase. According to the statistics of the third aerial work platform rental conference, domestic additions in 201830,000 sets of equipment, +66 per year.
67%, the average growth rate of the industry in the past 5 years reached 57.
As of the end of 2018, China’s aerial work platform market equipment holdings were about 9.
50,000 units, an increase of 46 in ten years.
2%, the average growth rate of 39 in the past 5 years.
The United States holds about 500,000 units. If the value added of the construction industry is used to benchmark the United States, the domestic market is expected to reach 400,000 units. The industry growth rate is expected to be no less than 30% during the 13th Five-Year Plan period.Will be higher than the industry.
② Arm-type products will become the company’s new profit growth point.
The company’s current arm production capacity is 400-500 units per year, and the production capacity is tight. With the new arm products developed by magni, the product performance is better and the failure rate is reduced. With the construction of the fourth phase of the plant, the equipment will be moved in in the future.The ceremony will be officially put into production.
We judge that the company’s transformation of the production capacity of arm products is gradually released, the scale effect is improved, the gross profit margin will continue to rise, and arm products are expected to become the company’s new profit growth point.
Investment suggestion: It is expected that the company’s net profit attributable to the mother for 2018-2020 will be 5 respectively.
95 and 10.
3.6 billion, a year-on-year increase of 77%, 38% and 49%.
The corresponding EPS are 2 respectively.
81 and 4.
18 yuan, corresponding to PE is 38, 28 and 19 times.
Maintain a highly recommended level.
Risk warning: fierce market competition; worsening trade war; the company’s fourth-stage capacity climbing progress is less than expected.