Linglong Tire (601966) Third Quarterly Report Review: Profitability Continues to Improve Overseas Layout and Supports Company Development
The company released the third quarter report of 2019, and the company achieved high growth in revenue. The first three quarters of 2019 achieved revenue of 125.
09 million yuan, an annual increase of 13.
26%; realized net profit attributable to mother 12.
140,000 yuan, an increase of 37 in ten years.
38%; realized non-net profit attributable to mothers 11.
170,000 yuan, an increase of 30 in ten years.
Among them, Q3 achieved revenue of 41 in a single quarter.
99 ppm, an increase of 10 per year.
41%, net profit attributable to mothers4.
8.9 billion, up 35 per year.
In terms of expense ratio, the company entered sales expenses7.
4.6 billion yuan, accounting for 5.
96%, a year to increase 0.
10 pct; enter management cost 3.
8 billion, with revenue accounting for 3.
03%, increase by 0 every year.
14 pct; enter R & D expenses 5.
2.9 billion, accounting for 4% of revenue.
23%, a year to raise 0.
52 pct; enter financial expenses 2.
3.6 billion, with revenue accounting for 1.
89%, a year up 0.
The change in the financial expense ratio was mainly due to the increase in convertible bonds and additional expenses of banks. Exchange rate changes affected the decrease in foreign exchange income from the same period of the previous year.
Single tire gross profit increased, profitability improved The company produced a total of 1,574 tires in the third quarter.
220,000 articles, an increase of 16 in ten years.
60%; sales 1470.
500,000 tires, an increase of 10 in ten years.
The price of a single tire is 282.
81 yuan, slightly lower than last year.
1 yuan; single-shoulder gross profit of 78 yuan.
60 yuan, an increase of 12 per year.
46 yuan; realized gross margin of 27.
79%, an increase of 4 from last year.
41. The company produced 4,480 tires in the first three quarters.
400,000 articles, an increase of 10 in ten years.
94%; sales 4228.
250,000 articles, an annual increase of 8.
The single price is 293.
03 yuan, up 11 from last year.
91 yuan; single-gross gross margin of 76.
93 yuan, an increase of 9 per year.
98 yuan; realized gross margin of 26.
25%, an increase of 2 from last year.
In the third quarter, the overall prices of the five main raw materials of natural rubber, synthetic rubber, carbon black, steel cord, and cord fabrics declined 7.
We judge that under the environment of the original downlink and the downturn of the automobile market, the company can achieve the stability of single tire prices and the increase in single tire profit mainly because: 1) the company’s product structure has improved, and the sales ratio of all-steel and 杭州桑拿 large-size semi-steel tiresIncrease; 2) Trade barriers impede the export of mainland tires, and overseas factories are profitable.
The overseas layout has made great strides to promote the development of anti-dumping and trade frictions. Domestic tire exports have been hindered, and the proportion of profits of overseas factories has increased.
The third phase of Linglong Thailand was put into production at the end of 2018 and full production in 2019. So far, the Thai factory has been operating at full capacity and has become the company’s main source of profit.
The company has been non-stop, has begun construction of a European Serbian factory, and plans to reach the end of 2020.
We believe that the strategic significance of the Serbian factory includes 1) becoming a new focus for overseas profits, 2) preventing double counter-reflection of Chinese semi-steel tires in Europe, 3) preventing double counter-reflection by the United States against Thailand, and 4) landing in the European market for the convenience of nearby EuropeOEM matching.
Supporting breakthroughs to enhance the company’s brand power According to the company’s official website, on August 26, Linglong Tire and Geely Automobile Research Institute comprehensive strategic cooperation agreement, Geely Automobile’s global factories will provide Linglong tires with stable, high share of supporting resources, we believeLinglong tires are expected to achieve a large amount of supporting for domestically produced high-end models.
In addition, the company also successfully supplied FAW-Volkswagen Jetta’s main tires in May, which is also the first time that domestic tires have been used for Volkswagen series cars.
With the company’s breakthroughs in domestic mid-to-high-end models and joint venture car series, we are optimistic that the company will accelerate its breakthrough in the supporting end in the future to achieve brand upgrades.
Investment suggestion: We expect the company’s net profit attributable to its mothers to be 16 in 2019-21.
08 and 22.
57 trillion, EPS is 1.
59 and 1.
88 yuan / share, corresponding to PE of 15.
21 and 11.
16 times, maintaining the “highly recommended” level.
Risk reminder: natural rubber disease in Southeast Asia, project put into production is not up to expectations, sales growth is not up to expectations