Jingu Co. (002488): Gross profit of manufacturing business stabilizes after the auto market upgrades new retail

Jingu Co. (002488): Gross profit of manufacturing business stabilizes after the auto market upgrades new retail
The event company released the 2018 annual report and the 2019 first quarter report: 2018 preliminary revenue of 2.7 billion megabytes (several percent), attributed to the mother’s net profit1.64 ppm (previously + 204%); first quarter 2019 revenue4.6.5 billion (-25% ago), net profit attributable to mothers was 287.1 billion (-22% per second). Opinion Manufacturing Business: The gross profit margin of steel wheels is stable, and EPS environmental protection high-end equipment grows rapidly.Steel wheel manufacturing is the company’s overall core business (2018 revenue accounted for 51%.43%), the demand is basically synchronized with the automobile cycle. The sluggish automobile boom in 2018 has led to the sales scale of steel wheel business (in 2018, it entered the steel wheel revenue 13).9 ‰, at least -1.17%), or drag on the overall financial data for the first quarter of 2019; however, the gross profit margin of steel wheels will be maintained above 20% in 2018, reflecting the company’s core competitive advantage in this field.It is expected that automobile consumption in 2019 is expected to be accompanied by stimulus policies, and the steel wheel business is likely to recover in the second half of 2019. At the same time, the company ‘s “Avatar Project” has significantly reduced the weight of steel wheels.Realized volume and price rose.The EPS high-end environmental protection equipment market has a capacity of nearly 10 billion U.S. dollars. In 2014, the company won the exclusive use rights of EPS technology in the United States by TMW in China.”Guide Catalog”, and was selected as “National Key Environmental Protection Practical Technology Catalog” by China Environmental Protection Industry Association; equipment customers have a wide coverage, including auto parts companies, special steel companies, steel processing centers, etc .; 2018 major revenue breakthrough1.500 million (+44.48%), gross margins as high as 47 in the absence of technology.91%, it is expected to maintain rapid growth in the next 1-2 years. New retail business in the automotive aftermarket: a pioneer in digitalization of the “Xin Kangzhong + Auto Superman” industry.Since 2013, the company has deeply cultivated the aftermarket of automobiles and established the Superman Project for automobiles.In August 2018, the company will become a part of the auto superman supply chain business and Alibaba Tmall and Kangzhong auto parts-related business strategic reorganization, the establishment of Xin Kangzhong, Ali is the largest shareholder, Jin Gu is the second largest shareholder.Upgrade of new automobile retail model: Xinkangzhong has become an industry infrastructure builder by providing online traffic and supply chain warehouse allocation capabilities; Auto Superman has empowered the transformation of offline auto repair stores through digital information means.After Xinkangzhong joined, the overall ecosystem has exclusive operating rights for Tmall and Taobao aftermarket business (except automotive supplies), sharing massive owner data on Tmall’s aftermarket retail platform, and casting competition barriers.2018 preliminary automotive aftermarket revenue9.56 ppm (at least -13.56%), we believe that the essence is that the aftermarket business of the automobile is in the process of transition and upgrading. The transformation of the auto superman store is expanding continuously. The new retail model of the automobile will hinder the business of this sector. Investment suggestion: The company’s traditional manufacturing repair is imminent, and the market service model upgrade after the new business triggers elasticity.Profit forecast: Due to the impact of the automotive industry cycle and the running-in period of the new retail business, the company’s short-term results have changed slightly in the first and second quarters, and it is expected to meet the inflection point in the second half of the year.0/4.4/5.400 million, EPS is 0.30/0.44/0.53 yuan, corresponding to PE 33/22/18 times; we believe that the company’s leading characteristics in the future automotive aftermarket service field, and the rapid growth of EPS environmental protection high-end equipment, according to the segment estimation method, the company’s target market value of 15 billion yuan (steelUS $ 2.4 billion in wheel manufacturing / US $ 4 billion in environmental protection equipment / US $ 8.6 billion in new car retail), maintaining a “Buy” rating with a 天津夜网 target price of 14.83 yuan. Risk warning: raw material price fluctuation risk; auto market downside risk; auto aftermarket competition risk.