Top Group (601689) Annual Report Commentary 18: Falling Gross Margin Slows Performance and Emerging Businesses Deserve Expectations

Top Group (601689) Annual Report Commentary 18: Falling Gross Margin Slows Performance and Emerging Businesses Deserve Expectations

The company’s 18-year operating income has increased by 17 per year.

6%, net profit attributable to mothers increases by 2 per year.

1% According to the annual report, the company achieved operating income of 59 in 18 years.

80,000 yuan, an increase of 17 in ten years.

6%, net profit attributable to mother 7.

5 ppm, a ten-year increase of 2.

1%, net of non-attributed net profit 6.

80,000 yuan, an increase of 0 in ten years.

5%; including single-quarter operating income of 15.

300 million, down 1 year.

4%, net profit attributable to mother 1.

4 ‰, a decrease of 27 per year.

1%, net of non-attributed net profit1.

2 ‰, a decrease of 36 per year.

8%.

The increase in Q4 company’s revenue decreased mainly due to the decline in downstream vehicle sales and the pressure on component prices caused by the decline in performance. The gross margin was under pressure due to rising costs of raw materials and labor.Management and financial costs also increased significantly.

In addition, the company intends to distribute a cash dividend of 6 per 10 shares.

87 yuan, a total dividend of nearly 500 million yuan, the dividend ratio reached 66.

35%.

In terms of financial indicators, the company’s gross profit margin and net profit margin for the 18 years were 26 respectively.

9%, 12.

6%, a decline of 2 per year.

1pct, 1.

9pc, of which Q4’s gross profit margin and net profit margin were 23 respectively.

7%, 8.

9%, compared with the previous quarter.

In terms of expense ratios, the company’s sales / management / R & D / financial expense ratios were 4 in 18 years.

9% / 3.

6% / 4.

8% / 0.

1%, of which the sales expense ratio / financial expense ratio decreased by 0 year-on-year.

4pct / 0.

2pct, the management expense ratio / R & D expense ratio exceeds 0.

3pct / 0.

4pct, because the company introduced a large number of technical talents on the research project at the same time, resulting in more research and development expense ratio.

The shock absorber and interior trim business is generally stable. It is worth looking forward to the mid-to-long-term layout of emerging businesses. The company’s total profit contribution is mainly the shock absorber and interior trim business components. The two businesses have become the industry’s leading advantages and will further increase market competitionAbility.

The lightweight chassis is one of the company’s short- and medium-term performance elasticity constraints. The company is one of the few manufacturers in the world that masters the core technology of high-strength steel and light alloys. It gradually develops alternative products and gradually puts them on the market.Close 11.

700 million, nearly doubled every year.The core of the company’s future strategy is high-value-added automotive electronic products. At present, the electronic vacuum pump has been upgraded. IBS (intelligent braking system) has entered the pre-marketing stage. The company plans to actively expand on the basis of electronic vacuum pumps and IBS to further enrich the company’s product line.

Investment suggestion The 重庆耍耍网 company is a leading supplier of NVH system integration in China. It maintains the steady development of the traditional main business while actively deploying new businesses such as lightweight chassis and automotive electronics, which form the basis for the company’s long-term growth.

We expect the company’s EPS to be 1 in 19-21.

09/1.

16/1.

25 yuan, the corresponding PE is 18 based on the latest closing price.

2/17.

1/15.

Nine times the combined company’s historical estimate and the average appraisal level of the parts and components industry. We give the company a 21-year PE estimate for 19 years, corresponding to a reasonable value of 22.

9 yuan / share, maintain “Buy” rating.

Risks suggest that the automotive industry is weaker than expected; sales from downstream customers are lower than expected; new 武汉夜生活网 project expansion is lower than expected.