Dayang Electric (002249) 2019 Interim Results Preview Comment-Profitability is gradually repaired to meet the cycle of upgrading and reducing quality

Dayang Electric (002249) 2019 Interim Results Preview Comment-Profitability is gradually repaired to meet the cycle of upgrading and reducing quality

The company foresees net profit attributable to mothers for the second half of 20192.

60 billion-3.

1.5 billion, deducting non-zero.

4.4 billion-0.

9.9 billion.

The company’s Vietnam plant is gradually put into operation to eliminate Sino-U.S. Trade friction turbulence, and future profits are expected to continue to be repaired, entering a cycle of improving quality and reducing costs.

Considering the company’s confirmation of the investment gains from the transfer of Beijing Patel’s shares, the company’s 2019-21 EPS forecast is adjusted to 0.

18/0.

11/0.

13 yuan (previous forecast was 0.

10/0.

11/0.

12 yuan), corresponding to PE 25/41/34 times, given a target price of 5.

50 yuan (corresponding to 31 times PE in 2019), maintain “overweight” rating.

Advance notice to net profit of mother 2.

60 billion-3.

1.5 billion, deducting non-zero.

4.4 billion-0.

9.9 billion.

The company released a semi-annual performance forecast on June 12, and it is estimated that the net profit attributable to the mother will be about 2 in 2019.

60 billion-3.

1.5 billion, a substantial increase of 134 in the same period.

65% -184.

28%, the company confirmed the transfer of a subsidiary of Beijing Peitelai 50% equity investment income2.

After the transfer, the company no longer holds Beijing Patel’s shares.

According to the company’s forecast, the non-attributable net profit for the first half of 2019 will be deducted.

4.4 billion-0.

99 ppm, a ten-year increase of -51.

33% -9.

88%.

Profits were under pressure in the first quarter, and recovery is expected in the second quarter.

The company reported revenue of 20 in the first quarter.

8.6 billion (+7.

33%, the same below), the production and sales scale 南京桑拿网 expanded.

Attribution / deduction of non-net profit is -0.

21 / -0.

2.6 billion (-167.

64% /-223.28%), profit pressure, the Sino-US trade friction caused the company to increase tariffs on exports to the United States and the cost of imported electronic components from the United States.

Therefore, the company implemented an industrial transfer strategy and transferred the household appliance motor production line to a Vietnamese factory, which was commissioned in the first half of 2019.

From the performance forecast point of view, the company’s second-quarter net profit after deducting non-attribution has improved, and the company’s industry transfer strategy has initially taken effect.

We judge that this strategy will further repair the company’s profitability in the third quarter, and the company will enter a cycle of upgrading and reducing costs.

Overweight fuel cells, the layout of the entire industry chain was initially completed.

The company is one of the domestic companies that entered the fuel cell industry earlier.

The company mainly grasps the fuel cell manufacturing capability through epitaxial expansion and uses its own electricity to drive customer channels to supply fuel cell products to Zhongtong Bus, Dongfeng Industrial and other commercial vehicle customers. In 2018, the company produced 600 fuel cell systems in batches.

Existing companies have laid out time for hydrogen storage, system integration, and core component compressors. In April 2019, they announced plans to acquire a 20% stake in Shanghai Remodeling, a leading domestic fuel cell company, to intensify the layout of fuel cells.

Fuel cell industrialization has accelerated significantly in 2019. The company relies on first-mover advantages and strong layout to try to replace market opportunities.

Risk factors: New energy vehicle sales are lower than expected, and fuel cell industrialization is lower than expected.

Investment suggestion: The company’s Vietnam plant will be gradually put into production to eliminate Sino-U.S. Trade friction disturbances. In the future, profitability will continue to be repaired, and the quality improvement and cost reduction cycle will enter.

Considering the company’s confirmation of the investment income from the transfer of Beijing Patel’s shares, the company’s EPS forecast for 2019-2021 is adjusted to 0.

18/0.

11/0.

13 yuan (previous forecast was 0.

10/0.

11/0.

12 yuan), corresponding to PE 25/41/36 times, given a target price of 5.

50 yuan (corresponding to 31 times PE in 2019), maintain “overweight” rating.