Hetai (002402) 2019 Interim Report Review: The gross profit rate of smart controller business rebounded and the development of radio frequency chips exceeded expectations
The event company released its 2019 interim report, and the company achieved operating income in the first half of 201917.
4 billion, net profit attributed to mother1.
700,000 yuan, deducting non-mother net 苏州夜网论坛 profit1.
63 ppm, with a one-year average of 41.
Brief Comment 1. The company has achieved sustained and rapid growth, and the gross profit margin of intelligent controllers in the main business has rebounded.
Thanks to the company’s major customer strategy and the fall in raw material prices, the company’s business still achieved rapid growth in the context of a complex and volatile macro economy.
In the first half of 2019, the company achieved revenue of 17.
400,000 yuan, net profit attributed to the mother1.
70 ppm, with a one-year average of 41.
In Q2 2019, the company’s revenue and net profit attributable to mother increased by 41.
92% and 37.
18%, an increase of 0 from the previous month.
52pct and 14.
The company’s intelligent controller business (excluding the impact of the new consolidated company NPE) has reduced its gross profit margin2.
24pct, in which the gross profit margin of the intelligent controller for power tools reaches 26.
28%, an increase of 7 per year.
The company’s comprehensive gross profit margin reached 22.
61%, an increase of 1.
The company’s revenue growth rate is higher than the net profit growth rate is the consolidated Italian subsidiary NPE, the company is expected to have a revenue scale of about 200 million, but the basic breakeven.
2. Subsidiary Kunchang Technology has grown rapidly and gradually realized unexpected development.
The subsidiary, Changchang Technology, specializes in microwave millimeter wave radio frequency chips, mainly for the military market, which can support 40GHz and below. The products involve power amplifiers, low-noise amplifiers and other chips.
In the first half of 2019, the revenue of Kunchang Technology reached 1.
30,000 yuan, an increase of 69 in ten years.
65%, net profit reached 0.
55 ppm, an increase of 71 in ten years.
We believe that the high growth of Kunchang Technology is related to the strong industry demand and the fact that many orders in 2018 were executed in the first half of this year.
Taking into account the company’s technical strength and future localization needs, we believe that the company’s long-term performance will likely exceed expectations.
3. The company’s Vietnam production base will be put into production soon, which is conducive to avoiding international trade risks.
The company is actively deploying new production capacity.In the first half of the year, the company invested in the establishment of a production base in the Shenzhen-Vietnam Cooperation Zone in Anyang County, Haiphong City, Vietnam, and invested 5 million US dollars in its own funds to establish Ho Teh Intelligent Control (Vietnam) Co., Ltd., which is expected to start production in October.
We believe that the layout of Vietnam’s production capacity is conducive for the company to resolve the impact of international trade risks and exchange rate changes, and it is also in line with the development strategy of the company’s layout.
In addition, the company’s intelligent controller production technology transformation and capacity expansion project Phase II has also been put into production.
Earnings forecast and grade: We expect the company’s revenue for 2019-2020 to be 35.
6.9 billion, 46.
Taking into account the uncertainty of foreign exchange loss gains and losses, as well as the company’s possible increase in R & D investment and increased depreciation expenses after conversion, we expect the company’s net profit attributable to its mothers to be 3 in 2019-2020.
100 million, 4.
400 million, EPS is 0.
36 yuan, 0.
51 yuan, corresponding to PE of 25X, 18X, maintaining the “buy” level.
Risk warning: the demand for intelligent controllers is lower than expected; the prices of upstream raw materials continue to increase; the company’s market share has expanded; Kunchang Technology has failed to meet expectations.