Eddy Precision (603638) 2019 First Quarterly Report Review: Hydraulic Breaker Leading Enterprise Increases Significantly in First Quarter
Investment Highlights: The company’s performance increased in the first quarter, and both achieved rapid growth from the previous quarter.In the first quarter of 2019, the company achieved revenue3.6 ppm, an increase of 68 in ten years.0%, an increase of 34 from the previous month.3%; realized net profit attributable to mother 8908.20,000 yuan, an annual increase of 74.5%, an increase of 78 from the previous month.0%; net profit after deduction to non-returned mother 8853.10,000 yuan, an increase of 73 in ten years.8%, an increase of 81 from the previous month.6%; realized expected return of 0.34 yuan.In the first quarter, excavator sales continued to exceed expectations, driving demand for hydraulic breakers and hydraulic components. The company’s production and sales of certain products boomed, and its performance continued to maintain rapid growth. Gross profit margin declined, and net profit margin increased slightly.In the first quarter, the company’s gross profit margin reached 43.2%, a decrease of 1 per year.7pct; net margin is 24.5%, increase by 0 every year.9 points; ROE is 8.0%, an increase of 2 a year.3 points.Increase the sales expense ratio / administrative expense ratio (including R & D) / financial expense ratio by 0.3 / -3.3/0.1pct.The company’s gross profit margin has decreased, but its net profit margin and ROE have continued to increase, its management expense ratio (including research and development) has fallen sharply, and 厦门夜网 its profitability has increased. In 2018, the business of hydraulic breakers increased significantly, and the main business of fixed-increasing code was developed.In 2018, the company’s hydraulic breakers / hydraulic components respectively achieved revenue6.6/3.500 million, an increase of 67 each year.2% / 43.8%; gross profit margins are 43.9% / 39.3%, each increase by 0.3 / -0.3 points.In 2018, benefiting from the continuous improvement of the construction machinery industry and the gradual release of the company’s initial investment projects, the company’s hydraulic breaker and hydraulic parts business has grown significantly.In 2018, the company plans to raise 7.The company plans to invest in hydraulic breakers, hydraulic motors, hydraulic main pumps and other products. After the project is completed, the company’s 杭州桑拿 production capacity will be effectively increased and its market share will continue to increase. The excavator market was hot in the first quarter.In March 2019, excavator sales4.40,000 units, an increase of 15 in ten years.7%, an increase of 136.2%, March sales reached the highest level in history.In the first quarter of 2019, excavator sales totaled 7.50,000 units, still achieving 24 against the high base last year.The ten-year growth rate of 5%, the excavator market in the first quarter continued the hot market in 2018, and the major OEMs in the peak season continued to produce and sell well.In 2019, the excavator industry has ample recovery momentum, and excavator sales are expected to reach a new high.The increase in sales of excavators is expected to drive the market sales of accessories such as hydraulic breakers, and the company’s performance in 2019 will promote continued high growth. In the future, the hammer rate of excavators is expected to increase.According to statistics, the developer’s hammer allocation rate is more than 35%, Japan, South Korea and other countries reach 60%, and the Gobi region in the Middle East and other regions has a hammer allocation rate of 80%.At present, the counterweight rate of excavators in developing countries is only 20-25%, and there is still room for development.The market demand of the breaker industry is expected to increase steadily in the future. Investment suggestion: The company is a leading company in the field of hydraulic demolition attachments and hydraulic parts in developing countries.We expect the company’s expected earnings for 2019/2020 to be 1.30/1.69 yuan, the current sustainable corresponding PE is 24.2/18.7 times, giving the company a “Recommended” rating. Risk reminders: macroeconomic fluctuations, decline in the industry’s prosperity, and increased market competition.