Hengrun (603985): Profits improve quarter by quarter, expecting further release of production capacity in the second half of the year

Key points of investment: The company released the 2019 half-year report. In the first half of 2019, the company achieved operating income6.

3.6 billion, 重庆耍耍网 an increase of 31 over the same period in 2018.

60%, achieving net profit attributable to shareholders of listed companies of 63.64 million yuan, an increase of 10 over the same period in 2018.


Ping An’s point of view: Profits improve quarter by quarter, and production capacity may be further released in the second half of the year: The company’s profit in the first half of 2019 is gradually improving, and the company’s revenue in the first and second quarters increased by 21 respectively.

43%, 39.

92%, net profit attributable to mothers doubled -14.

82%, 32.

28%, the overall gross profit margin of sales reached 22 respectively.

75%, 25.

20%; the current industry demand is strong, and the supply of core components is in short supply. We expect the company’s profitability to continue to recover in the second half of the year.

The company’s performance in the first quarter was less than expected, and was affected to some extent by the progress of new capacity commissioning. At present, the company has basically completed internal technical transformation and construction of 110KV substations, and its capacity may be further released in the second half of the year.

Further opening up the domestic market: Wind power-especially offshore wind power is an important downstream of the company’s products. After 10 years of development, the company has accumulated some high-quality customer resources in the EU, Japan and other countries. The company is General Electric, Siemens Gamesa, AlsThe direct or indirect suppliers of internationally renowned wind power equipment companies such as Tongtong and Vestas have been widely recognized in the field of offshore wind power.

With the large-scale construction of domestic wind power in recent years, the company has established good cooperative relations with Taisheng Wind Energy, Tianshun Wind Energy and other well-known domestic listed companies, and the customer structure has become increasingly rich.

Investment suggestion: At the industry level, we believe that the domestic wind power industry will have a rush installation market from 2019 to 2020, which is expected to strongly drive equipment-side demand; the global offshore wind power installation is active, and the market for core component funding will continue to be sought.

With the size of the company, Hengrun’s customer structure will become more and more diversified, which is expected to bring considerable order increase.

We are optimistic about the strong downstream demand and the excellent competitiveness of the company’s products, and maintain the company’s performance forecast. It is expected that the company’s EPS (current share capital dilution) for 2019-2021 will be 1.

25 yuan, 1.

70 yuan, 2.

12 yuan, corresponding to the current sustainable price-earnings ratio of 12 respectively.

2 times, 9.

0 times, 7.

2 times.

Maintain the “Recommended” level.

Risk reminders: (1) The risk of a significant reduction in the order volume of important customers. The company has a good customer structure and a considerable order volume on the right. However, if the large customers are affected by their own factors and the business volume is reduced, the company’s order volume will be affected.

(2) Upside risks of rising steel prices: If domestic environmental protection policies and supply-side reform policies continue to tighten, it may also support steel prices. If steel prices rise, the company’s product gross margin will decrease.

(3) Risk of failing to fulfill performance promises of the acquisition target: If Guangke Optoelectronics fails to fulfill performance promises, the conversion affects the company’s overall performance and will bear the risk of damage to goodwill.

(4) Risk of major shareholders ‘reduction: If there is a large-scale reduction of shareholders’ holdings before listing, it may bring pressure to the company in the short term.