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Zhengmei (601717) 2018 Annual Report Comments: Double Main Business Performance in Accordance with Expectations Steady Progress

Zhengmei (601717) 2018 Annual Report Comments: Double Main Business Performance in Accordance with Expectations Steady Progress
The company’s coal mining business will release its profit elasticity as scheduled. Advanced production capacity replacement and increasing mechanization rate will still support the steady growth of coal mining demand. The auto sector is full of orders, and the integration is smooth, maintaining a “Buy” rating. The company’s performance was in line with expectations, and the company’s stable operation recorded a new record high.The company achieved operating income of 260 in 2018.12 ppm, an increase of 244 in ten years.63%, achieving net profit attributable to mother 8.32 ppm, an increase of 192 in ten years.82%, net profit deducted from non-mother 5 was achieved.870,000 yuan, an 南京夜生活网 increase of 51 in ten years.70%, performance is in line with expectations.The preliminary company’s consolidated gross profit margin is 18.88%, compared with 22 of the previous year.20% down 3.32 pcts, a quarter-on-quarter increase of 0.09 pcts, the significant change in revenue and gross profit margin was mainly due to the SEG merger.The company’s three expense ratios total 13.47% remained stable with net operating cash flow.32 trillion hit a record high, customers have abundant cash flow, the quality of the company’s receivables is excellent, and gradually the asset impairment loss is 0.9.8 billion is overall controllable and apparently financially sound. The coal machine sector has a bright profit, and demand is still expected to be guaranteed.The report totals the company’s coal machine business operating income 82.USD 6.5 billion, an annual increase of 74%, and net profit attributable to mothers8.77 ‰, a 173% increase over ten years, and a gross profit margin of 31.85%, an increase of 7 per year.33 pcts, assets impairment loss of 10.56 million yuan.The coal machine business changed the situation where the Air Force steel prices increased rapidly and increased revenue but did not increase profits. As a hydraulic support oligarch company successfully raised prices, the gross profit margin increased, and the profit flexibility was realized.In the initial company’s coal machine business scheduling, the repayment (excluding trade) increased by 40% and 35% respectively, the highest in the past five years.The company continues the unmanned research and development direction of coal mining, and production costs have room to further decrease as efficiency increases. Under the generally stable replacement of coal prices, it is expected that the replacement of advanced production capacity and the increase in mechanization rate will still promote the steady increase in demand for coal machinesMachine segment revenue, gross profit margin and repayment are still expected to continue to perform well. The integration of the automobile sector has progressed smoothly, and customers have full quality orders.In recent years, the company has successively acquired ASIMCO and SEG to build a dual-main business of auto parts, and its operating income has gradually increased to 177.470,000 yuan, net profit attributed to the mother1.5.6 billion, of which SEG achieved operating income of 139.59 trillion, net profit 6863 trillion, financial debt index expenditure (after tax deduction) due to SEG mergers and acquisitions amounted to 90.82 million yuan.ASIMCO Elementary Accrual 1.The 09 billion impairment loss mainly came from the camshaft and NVH, but the overall profit of the asset package exceeded the commitment, and the provision reflects the company’s financial prudence.SEG’s gradual profit realization and integration progressed smoothly. The new factories in Changsha and Changchun were successfully put into operation to expand production capacity. Orders reached a record high. Subsequent German factory integration has significant room for improvement.The company’s automotive customers are of high quality (ASIMCO is FAW, Cummins, Weichai, Sinotruk, etc .; SEG is Daimler, BMW, Volkswagen, etc.), with full orders, helping to withstand the fluctuations of the upstream boom and achieve steady growth. Risk factors: Coal prices have risen sharply; raw material costs have increased; the progress and effectiveness of the integration of the automotive sector exceeded expectations. Investment suggestion: The company’s coal machine cash volume and price will rise at the same time. It is expected that demand will rise steadily and the integration of the automotive sector will be smoothly advanced. Maintain the company’s 2019-20 net profit forecast9.48, 10.4.5 billion US dollars, and another 2021 net profit forecast11.560,000 yuan, maintain “Buy” rating.