Great Wall Motor (601633): Proposed to acquire GM India factory for internationalization

Great Wall Motor (601633): Proposed to acquire GM India factory for internationalization
Event: Recently, the company and General Motors reached an agreement on the acquisition of GM’s India Taligang plant. According to the letter of intent signed by the two parties, including the GM India company in the Tarigang plant will be transferred to Great Wall Motors.And approval from relevant regulatory authorities.  Coinciding with the short-term downturn in the Indian auto market, the company’s strategic layout against the trend.The Indian auto market has a sales volume of about 3 to 4 million units, ranking among the top in the world. In 2019, the Indian auto market has shifted due to various reasons such as the economic downturn. Among them, the passenger car market has replaced about 20%.GM is considering the sale of the Taligan plant in India based on its global strategy. This coincides with the downturn in the Indian auto market and the company’s strategic layout against the trend. It is expected that the acquisition will have higher value.In February 2020, the company 武汉夜网论坛 will bring the Haval brand and Great Wall EV models to the Indian Motor Show in India, and announce the Indian market strategy to enter the Indian market.  The Indian auto market has huge potential and can take advantage of opportunities to enter the Middle East and African markets.India’s large and young population will continue to be in the demographic dividend period and the potential for rapid economic growth in the future. According to data released by the World Bank, the number of thousand people in the Indian market in 2019 is only 22, and the market space is huge.In addition, India is located at the northern end of the Indian Ocean. The factory is located in the state of Maharashtra, which attracts the most foreign investment in India. Its capital, Mumbai, is the financial center and one of the three major ports in India. This time, it can open the Indian market.Can expand the Middle East and African markets west.  Make more efforts, and take internationalization one step further.Great Wall Motors has achieved global distribution in research and development, and has various research and development centers in the United States, Germany, Austria, India, Japan and other places.Pickup and SUV models have also been sold worldwide. At the same time, the China-Russia all-craftsmanship plant has been successfully put into production in 2019, and it has become the highest overseas plant for domestic car companies. The WEY brand was established in 2021 and will enter the European market.Internationalization has become more powerful, and the proposed acquisition of GM’s Indian plant is about to launch, which will take the company’s internationalization process one step further.  Investment suggestion: After the Russian plant is put into production in 2019 to open the Eastern European market, the company’s internationalization road has further advanced to India, and it is worth looking forward to in the future.The current industry is at the bottom of certainty, and the company still has some flexibility when the industry recovers. Pacific Motors will continue to strategically recommend Great Wall Motors in 2020. It is expected that the company’s net profit attributable to its mothers in 19/20 will be 4.9 billion / 6 billion, respectively.Buy “level.  Risk reminder: The sales volume of the automobile industry is lower than expected, and the price reduction promotion is larger than expected

Boss Electric (002508): Real estate recovery drives engineering channel growth, industry downturn does not change growth attributes

Boss Electric (002508): Real estate recovery drives engineering channel growth, industry downturn does not change growth attributes
Event Overview The company released the third quarter report of 2019, and the company achieved operating income in the first three quarters of 56.25 ppm, a ten-year increase4.3%, net profit attributable to mother 10.86 ppm, a ten-year increase of 7.3%.Among them, the third quarter realized operating income.98 ppm, an increase of 10 in ten years.6%, net profit attributable to mother 4.15 ppm, an increase of 18 in ten years.2%. Analysis and judgment: The growth rate of Q3’s income end picked up, mainly due to the excellent performance of engineering channels under the rebound of real estate. The company’s revenue growth rate in Q3 2019 was 10.6%, compared with Q1 and Q2 revenue growth rate of 4.3%, -2.0% rebounded significantly.In the first half of 2019, due to the impact of land, the kitchen appliance industry was under pressure, and traditional types of range hoods and gas stoves were replaced with different incomes, and the average price of products was also replaced.According to the overall data pushed down by Aowei Cloud, the retail sales of kitchen appliances (range hoods, gas stoves, disinfection cabinets) on January 9, 2019 was US $ 31 billion, a decrease of 11.5%.According to Zhongyikang’s offline retail data, 2019Q3 range hoods except for YOY + 7 retail sales in August.1%, retail sales +4.In addition to achieving a positive growth rate of 3%, the growth rate in July and September continued the trend and the decline continued.Although the kitchen appliance industry is still under pressure, the industry has structural adjustment opportunities.From January to September 2019, the newly started residential area is YOY + 8.8% of the completed area of the house is YOY-8.5% of residential sales area YOY + 1.1%.Among them, the new construction area of housing in September 2019 was YOY + 8.2%, residential completed area YOY + 1.1%, residential sales area YOY + 4.6%.The completion of residential buildings increased rapidly and the monthly improvement improved. The real estate warming brought structural changes to the kitchen appliance industry. Under the fine decoration policy, manufacturers had a high degree of order concentration. The company has many years of in-depth cultivation experience in engineering channels, thereby generating revenue. Cost dividends continue to improve the level of gross profit margins, driving the increase in net profit margins. The company’s gross profit margin in Q3 2019 was 55.7%, a gross profit margin of 54 in Q2 2019.5% increase by 1.2pct, at least 2018Q3 gross margin of 53.1% increase by 2.6 points.Under the background of the decline in the terminal price of kitchen appliances, the ex-factory price of products has increased significantly. The increase in gross profit margin is mainly due to the decline in raw material costs.The sales expense ratio of the company in Q3 2019 was 27%, ten years -1.0pct, ring than +1.4pct. The increase in the sales expense ratio from the previous quarter was mainly due to the company’s continued strengthening of its channel layout.2019Q3 company management expense ratio 3.2% per year -0.2pct, ring than -0.3 points; R & D expense ratio 3.64%, -0 per year.12pct, ring than +0.07 points.In summary, the company’s net interest rate in Q3 2019 was 20.15%, +1.39 points, +1.19 points.Net cash flow from operating activities of the company in Q3 20193.77 ppm, a 10-year increase3.77 times, down 23% from the previous month.Due to the long account period of the engineering channel and the slow repayment, the company’s accounts receivable in the first three quarters of 20195.40,000 yuan, an increase of 63 in ten years.55%, an increase of 2 from 2019H1.7%. Category expansion layout contributes new growth points in the future. The company has a clear competitive advantage in the traditional kitchen appliance category and has a solid market share.However, in the context of the weak industry demand for traditional kitchen appliances, the company actively explored new categories such as integrated stoves and dishwashers in the early stages of growth, and added revenue to the layout.According to the overall 无锡桑拿网 data pushed down by Aowei Cloud, the retail sales of cabinets on January 9, 2019 was 29 trillion, with a long-term growth of 28.2%, the growth rate is higher than that of small household appliances.In the short term, the revenue of new products is relatively small, and its contribution to performance is insufficient. However, the penetration rate of products such as dishwashers and steaming and baking machines is insufficient, and there is broad room for growth. Investment suggestions Since July, the growth rate of land and real estate completed area has improved month by month. It is expected that the land recovery will continue to improve in the second half of the year.Under the fine decoration policy, the company has fully benefited from the engineering channel. Traditional kitchen appliances have a competitive advantage and demand can be improved.At the same time, the company deepened its channel layout and new product expansion, contributing to revenue growth.We expect the company’s operating income for 2019-2021 to be 78.86/86.52/97.31 ppm, a six-year increase of 6.2% / 9.7% / 12.5%, net profit attributable to mother 16.13/17.62/19.45 ppm, a ten-year increase of 9.45% / 9.23% / 10.41%, earnings per share is 1.70/1.86/2.05 yuan, corresponding to the current expected PE is 17/16/14 times. As of October 28, 2019, comparable companies in the kitchen appliance industry (Hua Di shares, Zhejiang Meida) wind unanimously expected an average PE of 15 times in 2019. Considering the robustness of the company’s traditional business and the competitive engineering channel layout, for the first timeCoverage is given an “overweight” rating. Risk prompts macroeconomic downside risks, real estate growth risks, risks of changes in raw material costs

Zhongshun Jierou (002511): Interim Performance Exceeds Expected Profitability Improves Season by Quarter

Zhongshun Jierou (002511): Interim Performance Exceeds Expected Profitability Improves Season by Quarter

Investment Highlights Event: The company released its semi-annual report for 2019 and realized operating income of 31 in 2019H1.

72 ppm, an increase of 22 in ten years.

67%; net profit attributable to mother is 2.

75 ppm, an increase of 37 in ten years.


Among them, Q2 single quarter realized operating income of 16.

32 ppm, an increase of 19 years.

88%; net profit attributable to mother 1.

51 ppm, an increase of 49 in ten years.


  Revenue has grown steadily, and profits have improved quarter by quarter.

In the first half of 2019, the company adjusted its product structure and carried out a comprehensive marketing layout to achieve steady growth. Revenue and net profit attributable to mothers increased year by year.

72%, 37.


  Among them, in the second quarter of 2019, single-quarter revenue and net profit increased by 19 year-on-year.

88%, 49.


The growth rate of Q2 net profit accelerated, mainly due to the increase in the proportion of key products such as noodles, emulsions, and natural wood, and the decline in raw material pulp prices.

Correspondingly, the company’s gross profit margin and net profit margin also increased quarter by quarter, with a gross profit margin of 39 in Q2 2019.

23%, a year-on-year increase of 4.

85, 5.

22pct; net margin is 9.

28%, a year-on-year increase of 1 each.

85, 1.

27 points.

The expense rate during the period is relatively high and stable.

The company’s cash flow recovery situation has improved significantly, and the company’s net cash generated from operating activities in the first half of the year was 7.

35 ppm, a year-on-year increase of 341%, maintaining a high level since listing.

  The product structure continued to be optimized, and a new product launch contributed to the increase.

The company continued to optimize the product structure, increasing the share of key products such as face, lotion, and natural wood in various channels, which continued until April 2019, and the company’s key category revenue accounted for over 60%.

In fact, the company has continuously increased its R & D investment, launched new products and new product lines with rich product categories. The company’s R & D expenses for 2019H1 are zero.

64 ppm, a ten-year increase of 8.

80%, accounting for 1% of operating income from 2018.

89% increased to 2 in 2019H1.


Attracted by high research and development, following the “new cotton early white”, the company launched a personal care product “Dorei honey” sanitary napkin products in June 2019, and hired the company to hire the golden horse shadow Ma Sichun as the company’s Jierou & Dorei honey spokespersonTo enhance brand influence and competitiveness.
In July 2019, it is planned to build a 30-insert bamboo pulp and paper integration project. The company will use “Sun” as the project brand, use the advantages of domestic bamboo resources to obtain raw materials, and develop the domestic mid-end household paper market.

In terms of channels, the four major channels of KA / GT / AFH / EC go hand in hand and all have achieved good growth. The counties and cities covered by the products have reached over 60%.
In 2019, the company continued to increase its investment in major e-commerce platforms, gradually turning some key stores into direct sales of the company, and adding new mother and infant and new retail channels at the end of 2018 to drive performance growth.

  The downward blending of pulp prices supplemented the downward adjustment, and the profitability increased quarter by quarter.

The company’s main raw material pulp prices remained high in 2018, and the average unit prices of bleached coniferous pulp and bleached broadleaf pulp remained at US $ 800-880 / tonne and US $ 700-750 / tonne respectively.Since 2019, the price of pulp has fallen sharply.The average unit prices of imported leaf pulp and bleached leaf pulp are currently 696 and 611, respectively.

USD 2 / ton, down 20 from the same period last year.

53%, 17.


  On average, the Q2 compression was reduced from 16% to 13%, which is beneficial to the company’s procurement costs and its 北京夜网 profitability is increasing quarter by quarter.

And from the perspective of pulp, at present, the stocks of wood pulp in Qingdao, Changshu, Baoding and other ports have risen month by month, and the prices of outer disk coniferous pulp and broadleaf pulp have been stable. Pulp prices are expected to remain low in the second half of the year, and profitability will continue to increase.

  Investment suggestion: We are optimistic about the increase in profitability caused by the downward movement of pulp prices, the expansion of the reduction and the optimization of the company’s product structure, as well as the growth potential brought by the introduction of new products into the personal protection field. We increase our profit forecast for the company.Net profit in 2021 will be 5.

83, 7.

14, 8.

5.6 billion, corresponding PE is 29, 24, 20 times respectively, maintaining the “Buy-A” recommendation.

  Risk reminders: the risk of dynamic fluctuations in pulp prices; the risk of exchange rate changes; the promotion of new products is not up to expectations.