Zoomlion (000157): Q1 performance exceeded expectations, optimistic about cranes, concrete machines continue to grow rapidly

Zoomlion (000157): Q1 performance exceeded expectations, optimistic about cranes, concrete machines continue to grow rapidly

Event: The company released a quarterly report and achieved 90 revenue.

200 million (previously +41.

8%); 100% return to mother’s net profit (100% + 166%), deducting 8% from non- return to mother’s net profit.

200 million (previously +192.

3%).

  The performance of investment points exceeded expectations, and cranes and concrete machines as post-cycle products will have high growth in relay excavators: The company stated in its quarterly notice that the net profit attributable to mothers increased by 125 compared to the same period last year.

61% -178.

69%, an actual increase of 166%, close to the upper limit of performance forecast.

We judged that the main products continued to be strong in production and sales, both volume and price went up, and the market share of 北京桑拿 internal products of cranes and concrete machinery continued to maintain “one of the best.”

Since the beginning of spring 2019, the construction machinery industry is still booming. Under the two major factors of the rebound in infrastructure investment growth and the need for accelerated environmental protection updates, cranes and concrete machines are post-cycle varieties, and relay excavators have grown rapidly.

Since April, cranes and concrete machines have started well and sales are expected to continue to exceed expectations. We believe Zoomlion, which focuses on these two major businesses, will benefit significantly.

  Gross profit margin and net profit margin increased quarter by quarter, and expenses were well controlled: in Q1 2019, the gross gross profit margin was 30%, which increased by +4.

7pct; net 武汉夜网论坛 interest rate is 11.

1%, ten years +5.

2pct.

Profitability has gradually increased year by year since 2018. We judge the main reasons are as follows: (1) The scale effect brought by the increase in product sales growth.

(2) The impact of price increases. The company’s main product, tower cranes, implemented price increases in 2018, and we expect that the price increase effect will really begin to appear in 2019.

  (3) Product structure adjustment. The proportion of high-margin products such as cranes and pump trucks in revenue increased, while the proportion of low-margin products such as agricultural machinery continued to decrease.

  Expenses during Q1 18.

5%, year -1.

34pct, mainly benefit from the company’s strict control of expenses.

The selling expense ratio is 7.

9%, flat for one year; management expense ratio (including R & D expense ratio) 6.

1%, year -1.

7pct; financial expense ratio 4.

5% each time +0.

4pct.

  Operating cash flow has tripled every year, and operating efficiency has improved significantly: the company’s net operating cash flow for Q1 was 18.

700 million, at least 4.
.

The 500 million increase was 312%, mainly due to the sales of goods, and the cash received from providing labor services increased by 3.2 billion compared with the same period of the previous year. Since the beginning of the second quarter of 2018, the company’s average operating cash flow price has remained at a high level (over 10 billion), The credit sales policy is strictly controlled, and the average down payment ratio reaches 40%.

  In addition, the company’s operating efficiency has also been significantly improved, in which accounts receivable turnover days interval -81 days, inventory turnover days interval -23 days.

Under the strict control of credit gate intelligence and working capital, the company’s revenue and operating capacity increased simultaneously, indicating a real qualitative growth.

  The strategic focus effect is prominent, and the development of new business earthmoving machinery + aerial work platform is expected: the company is committed to precision engineering machinery, and the engineering machinery advantage segment is conducive to strengthening and highlighting.

The company’s domestic market share of hoisting machinery and concrete machinery has maintained the “top one” position. Among them, construction hoisting machinery and concrete long boom pump trucks have maintained the top position in the industry, and the main product market has continued to improve.

  In addition, the company also strengthened the development of potential emerging markets.

The G series of new generation earthmoving machinery products developed by the company have been launched on the market, and the sales channels are being deployed. At the same time, the deployment of aerial platform products has been accelerated. In October 2018, three types of high-end intelligent products in three categories were released, which is conducive to the rapid growth of downstreamDemand; continuous development of mechanism sand, dry-mixed mortar, and jet manipulator business, with good momentum.

  Earnings forecast and investment rating: We expect the company’s net profit in 2019/2020/2021 to be 3, 36, and 4.1 billion US dollars, corresponding to PE of 13/11 / 9X, and give a “buy” rating.
  Risk warning: The boom of the construction machinery industry is less than expected; new business development is less than expected.