Liugong (000528)： Net profit attributable to mothers in Q3 achieves substantial growth; industry prosperity expected in Q4
Liugong (000528): Net profit attributable to mothers in Q3 achieves substantial growth; industry prosperity expected in Q4
The company announced the third quarter of 2019 and achieved operating income of 142.
19 ppm, a five-year increase of 5.
59%, net profit attributable to owners of the parent company.
82 ppm, an increase of 23 in ten years.
31%; operating income of 40 in the third quarter.
88 ppm, a 10-year increase of 10.
15%, achieving net profit attributable to owners of the parent company.
21 ppm, an 85-year increase.
16%, achieving significant growth.
Rising gross profit margins have boosted profitability.
On January 9, 2019, the company’s gross profit margin reached 23.
98%, gross profit margin in the third quarter of 26.
15%, an increase of 3 in the earlier half of Q3.
25pct, which is an increase of 3 from 19Q2.
At 13 points, the net profit margin to the mother in the third quarter reached 5.
41%, a significant increase in 18Q3 every year.
We believe that the improvement of the company’s gross profit margin is mainly driven by changes in product structure and tax reduction policies, and also reflects that the company’s products are more competitive.
In the third quarter, the company’s sales expense ratio, management expense ratio and R & D expense ratio reached 11 respectively.
57%, a slight increase from the previous month, but remained basically stable.
The excavator and loader industries continued to grow, and the boom is expected to continue in the fourth quarter.
According to the statistics of China Construction Machinery Industry Association, the total sales volume of excavators from January to September 2019 was 179,195 units, a year-on-year increase of 14.
7%; domestic sales of 159810 units gradually, a year-on-year increase of 12.
2%; 19,385 units were gradually exported, an increase of 39 throughout the year.
The total sales volume of loaders on January 9, 2019 was 93,716 units, an increase of 3 per year.
29%; 75254 units are gradually sold domestically, surpassing growth by 2.
91%; 18,462 units are gradually imported and exported, surpassing the growth of 4.
From the policy guidance of 2018-2019, we believe that the requirements for the excavator engine emission standards are becoming stricter, and excavators that do not meet the latest emission standards may accelerate their replacement. We believe that the prosperity of the excavator industry chain is stimulated by policy factors.It is expected to continue, and the industry is expected to enter the second “small peak season” of the year with strong production and sales in the fourth quarter.
Profit forecast: In the third quarter, the company’s revenue and profits will achieve good growth. We believe that the company’s competitiveness will gradually improve.
With the continued prosperity of the industry, we believe that the company’s performance is expected to continue to achieve higher growth. We slightly raise our profit forecast and expect the company’s diluted EPS in 19-21 to be 0.
92 yuan / share.
At the closing price of October 29, 2019 6.Calculated at 38 yuan, PE is 8 in 2019-2021.
93 times, according to comparable company estimates, we give the company 11-13 times PE in 2019, corresponding to 7.
23 yuan, given the “primary market” investment rating.
Risk warning: Macroeconomic downturn, raw material prices fluctuate, and overseas expansion exceeds 杭州桑拿网 expectations.