20180822-中国银河国际证券-海天国际-01882.HK-1H18_results_show_its_capability_to_withstand_the_industry_down-cycle_4页_1mb
报告摘要
Haitian International 1H18 Results Summary
Core Content
Haitian International (1882.HK) reported its first-half of 2018 (1H18) results, which did not offer major positive surprises to the market. However, the share price reacted positively due to the company's superior sales growth compared to its industry peers. The results highlight the company's resilience during an industry downturn and its strategic focus on long-term growth through R&D, digital transformation, and international expansion.
Key Financial Performance
- Total Revenue: Increased by 16.7% YoY to RMB5,877 million.
- Total Profit: Rose by 24.2% YoY to RMB1,170 million.
- Recurring Net Profit: Grew by 5.1% YoY to RMB1,076 million, excluding revaluation gains from its CB.
- Gross Profit Margin (GPM): Contracted by 4.1ppt YoY to 31.0% due to rising raw material costs and RMB exchange rate fluctuations.
- Operating Profit: Increased by 17.4% YoY to RMB1,363 million.
- Operating Profit Margin (OPM): Slightly improved to 23.2%.
- Net Profit to Common Shareholders: Grew by 24.2% YoY to RMB1,169 million.
- Net Margin: Improved to 20.4%.
- Earnings Per Share (EPS): Reporting EPS was RMB0.73, up 24.2% YoY.
- Recurring EPS: RMB0.67, up 5.1% YoY.
- Dividend Yield: Stood at 3.2% for 2018E, with a slight increase expected for 2019E.
Sales Growth and Market Position
- Domestic Sales Volume: Rose by 18.0% YoY, significantly outperforming the industry average of 1% YoY.
- Export Sales Volume: Increased by 13.5% YoY, while the industry average declined by 2% YoY.
- Revenue Mix Improvement: The average product selling price increased by 8.5% YoY, driven by higher sales contributions from electric plastic injection moldings machinery (PIMM) and large-tonnage PIMM products.
Outlook for 2H18
- Cautious Earnings Growth Expectation: Management anticipates slower sales growth in Q3 2018 due to a high-base effect and external pressures from the U.S.-China trade dispute and political risks in the EU.
- Positive Factors: The central government's infrastructure investment push is expected to partially support domestic sales. A depreciating RMB may also help improve gross profit margins, provided demand and commodity prices remain stable.
Strategic Initiatives
- R&D Investment: The company is expected to launch its 3rd generation PIMM products in 2H18, featuring fully upgraded technology for mid-to-high-end markets.
- Digital Transformation: Haitian is upgrading its SAP system and adopting the "8+16" fully-automated production system to enhance operational efficiency and decision-making.
- Internationalization: To mitigate the impact of trade disputes, the company is increasing investments in overseas markets such as India, Mexico, and Russia.
Valuation Analysis
- Current Share Price: HK$18.00.
- PER (2018E/2019E): 10.7x and 9.8x, respectively.
- Ex-Cash PER: 8.2x (2018E) and 7.4x (2019E), reflecting a strong net cash position.
- Valuation Perspective: Despite the short-term unexciting outlook, the company's long-term growth potential through R&D, digital transformation, and international expansion suggests that the current valuation may not be excessive.
Peer Comparison
| Company | Mkt Cap (US$ m) | Price (HK$) | 2018E PER | 2019E PER | EPS Growth (2018E) | EPS Growth (2019E) | PEG | P/B (2018E) | P/B (2019E) | ROE (2018E) | ROE (2019E) |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Haitian International | 3,660 | 18.00 | 10.7 | 9.8 | 21.8% | 10.8% | 0.5 | 2.1 | 1.8 | 19.3% | 18.6% |
| Guangdong Dongfang Precision | 13,852 | 15.56 | 11.8 | 10.2 | 16.5% | 15.0% | 0.7 | 2.4 | 2.0 | 20.3% | 19.7% |
| Guangdong Yizumi Precision Machinery | 3,550 | 25.62 | 13.9 | 11.4 | 15.9% | 21.9% | 0.9 | 3.8 | 3.1 | 27.0% | 27.2% |
| Guangdong Jinming Machinery Company | 5,827 | 48.60 | 24.6 | 20.5 | 23.6% | 19.8% | 1.0 | 6.4 | 5.3 | 26.1% | 26.0% |
| Tianjin Saixiang Technology Company | 3,977 | 47.65 | 16.6 | 13.9 | 20.3% | 19.6% | 0.8 | 3.6 | 3.0 | 21.4% | 21.3% |
Investment Considerations
- The company's resilience in a weak industry environment is a key strength.
- Strategic investments in R&D and digital transformation are expected to drive long-term growth.
- Valuation appears reasonable when considering long-term growth prospects.
- Uncertainty remains due to trade disputes and geopolitical risks, but the company is proactively diversifying its market exposure.
Disclaimer and Disclosure
- The report is issued by China Galaxy International Securities (Hong Kong) Co., Limited.
- Conflicts of interest may exist due to the company's financial interests in the subject company.
- Analyst certification confirms that the views expressed are based on personal judgment and not influenced by compensation.
- No representation or warranty is made regarding the accuracy or completeness of the report.
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