Zhejiang Dingli (603338) 2019 Interim Report Review: North American Market Slows Interim Report Performance Domestic Revenue Steadily Increases, Arm-type Products Are Massive

The performance of the interim report increased by 24%, and the company’s profitability remained stable. The company released the 2019 interim report and achieved revenue of 8.

49 trillion, ten years +8.

05%; net profit attributable to mother 2.

6 billion yuan, +26 per year.重庆耍耍网

79%; deducted non-attributed net profit 2.

34 trillion, +23 a year.

71%, lower-than-expected results, mainly due to the impact of the Sino-US trade war, and the sharp decline in North American business revenue.

The company’s gross profit / net margin for the year 19H1 was 41.

73% / 30.

67%, ten years +3.

09/4.

53 pct; the company’s period rate control is good, management (including research and development) / sales / financial expenses 5.

94% / 5.

27% /-2.

06%, short-term change -0.

03/0.

09 / -0.

91 pct, financial expenses are mainly due to the increase in index revenue.

The North American business has grown significantly. The company actively adjusted its product structure to optimize regional revenue structure. By region, the company’s domestic revenue in 19H1 was 4.

01 ten percent, +35.

22%, accounting for 51.

13% (decade +13.

24 pct); foreign Europe / Asia Pacific and others / US revenue is 1.

49/1.

09/1.

26 trillion, +47 a year.

16% / 21.

84% /-53.

64%, income ratio is 18.

96% / 13.

83% / 16.

08%, change in ten years 8.

27/4.

42 / -12.

69.

North America’s revenue has dropped significantly. In order to reduce the impact of Sino-U.S. Trade frictions, expansion companies actively reduced the North American market’s sales share and increased the share of overseas markets such as Asia and Europe. They replaced high-altitude operation platforms in the US’s 25% tariff list.Since the beginning of the quarter, the company’s North American customer purchases have decreased significantly.

On the whole, the company’s domestic revenue increased rapidly in 19H1, the Asian and European markets expanded significantly, and the optimization of the regional revenue structure of its products reduced the impact of the North American market.

Arm-type new products are rapidly advancing, and the company is expected to increase its volume in 19H1 to achieve zero domestic revenue in 20 years.7.2 billion (+88.

18%), accounting for 17% of domestic income.

84% (decade +5.

02 pct), of which the proportion of the new arm type is rapidly increasing.

The new arm type company is developed in cooperation with Magni. It adopts an appropriate design, 95% of the main components are common, and more than 80% of the structural components are common. As long as the customer maintenance personnel will repair and maintain 1 piece of equipment, they can deal with all sizes of maintenance problems and maintenance efficiencyIncreased labor costs are reduced; customers only need a set of wearing parts to cope with all sudden failures and reduce parts procurement and storage costs.

The company actively carried out arm-type product trial activities in the first half of the year, and the response is currently good.

We expect that after the company’s “annual production of 3,200 boom-type large-scale intelligent aerial work platform construction project” reached production in the first half of 20 years, the boom-type volume is expected to drive the company’s rapid growth in performance.

Earnings forecast and investment advice: Reduce the company’s net profit in 2019-21 to 5.

83/7.

63/10.

23 trillion, currently corresponding to PE40 / 31/23 times.

Maintain “Buy” rating.

Risk warning: industry competition intensifies; Sino-US trade frictions intensify; investment projects fail to meet expectations.