Addison Precision (603638): Performance in line with expectations

Addison Precision (603638): Performance in line with expectations
Core point of view: The company released a 19-year interim report, and the company’s operating income in 2019H17.430,000 yuan, an increase of 47 in ten years.56%; net profit attributable to mothers1.82 ppm, an increase of 48 in ten years.92%. Demand for breakers has continued, cashback has been strengthened, and cash flow has increased. According to data from the Construction Machinery Association, domestic excavator sales in the first half of 2019.720,000 units, an increase of 14 in ten years.2%.At the same time, after the demolition operations in cities, mining metallurgy, road maintenance and other fields gradually use the breaker to replace the traditional model. The increase in the ratio of hammers and the continued prosperity of the downstream have driven the demand for breakers.According to the company’s semi-annual report, the company’s revenue growth was mainly due to large breakers and hydraulic components.In terms of quarters, the company’s revenue in 19Q2 was 3.79 trillion, an increase of 32 in ten years.08%; net profit attributable to mother is 92.59 million yuan, an annual increase of 30.53%.The company strengthened the management of accounts receivable, and the operating net cash flow in the first half of the year was 77.23 million yuan, a 10-year increase.87%.19H1’s overall gross margin and net profit margin were 43.17%, 24.45%, it is estimated that the overall pick-up last year. In view of the continuous heavy 杭州桑拿 volume of hydraulic components and maintaining a high growth rate, 19H1 Company’s hydraulic components revenue was 2.30,000 yuan, an annual increase of 37.29%.Due to the generally high working intensity of construction machinery every year, the shortening of the actual use cycle of hydraulic parts promotes the increase of replacement frequency.In 2018, the subsidiary’s hydraulic technology realized a net profit of 71.85 million yuan, and the hydraulic parts business began to gradually and steadily contribute to net profit.According to the disclosure of the announcement, the company intends to raise funds for non-public offering of no more than 700 million US dollars, which is mainly used for the expansion projects of hydraulic motors, main pumps and breakers.Based on the aftermarket, the company’s hydraulic parts began to enter the 武汉夜生活网 field of front-loading, and gradually made some breakthroughs, gradually expanded, and gradually increased the scope of customers. Investment advice: We predict that the company’s EPS in 19-21 will be 0.86/1.25/1.59 yuan / share.The PE of peer companies in 2019 is estimated to be 32x. The company and comparable companies are similar in industry characteristics and competition pattern. They are both leading enterprises in the field of specialized equipment.52 yuan / share, continue to maintain a “buy” rating. Risk warning: industry demand is lower than expected; new product development fails to meet expectations; intensified industry competition leads to price fluctuations; new capacity expansion is less than expected.