Hengli Hydraulic (601100): Q2 profit margin hits record high non-digging pump valve, smooth expansion of rotary motor

Hengli Hydraulic (601100): Q2 profit margin hits record high non-digging pump valve, smooth expansion of rotary motor

Reading of this report: From the perspective of revenue, the expansion of 19H1 pump valve continues to increase, batch matching of non-digging pump valves, small batch verification of rotary motors, and stable growth of oil cylinders. From the perspective of profit, scale advantage, structural optimization, and 19Q2 profitability reach a record high.

Investment Highlights: Conclusion: The company achieved revenue in 19H1, and the profit attributable to the parent company was 27.

9 billion, 6.

700 million, an increase of 29.

1%, 44.

7%, including deduction of non-profit 6.

300 million, an increase of 49.

6%, in line with expectations.

In terms of revenue, the proportion of pumps and valves has continued to increase, non-digging equipment, slewing motors have been verified, and the oil cylinder has maintained steady growth. In terms of profit, scale advantages, structural optimization, and 19Q2 profitability have reached a record high.

Based on the short-term growth rate of Q2, the EPS for 2019-21 is reduced to 1.

37 (-0.

06), 1.

70 (-0.

04), 2.

07 (-0.

04) Yuan, taking into account the steady advancement of localization of pump and valve, maintaining a target price of 35.

36 yuan, increase holdings.

The expansion and expansion of the digging pump valve, the non-digging pump valve, the expansion of the rotary motor smoothly.

Small digging maintains a 30-40% share; medium and large digging has been supporting large quantities since 19 years, and the share has been increased monthly.

19H1 hydraulic pump valve revenue doubled, due to the increase in production capacity Q2 vertical growth rate, production line upgrade after the production capacity increase, judge H2 to maintain high growth.

In addition, the slewing motor of the excavator has been verified in small batches of 6-50 tons. AWP pump valves and other non-digging hydraulic parts have been supplied in large quantities. Cranes and concrete pump trucks have also been put into operation.

The structure of the excavator oil cylinder was upgraded, and the non-standard stable growth.

19H1 excavator cylinder 南京龙凤网 sales 25.

60,000 (+ 13%), revenue of 12.

300 million (+ 25%), structural upgrade, average price increase; non-standard 7.

90,000 (+ 18%), revenue of 6.

300 million (+ 8%), because some non-standard production capacity was occupied by excavator cylinders, some orders were pushed to 19H2 for delivery.

In addition, sales of 19H1 castings increased by 30% and revenue was 2.

300 million, an increase of 21%. The second phase of the casting production line was trial-produced in June 19, and the total casting production capacity is expected to reach 5 by the end of 19th.

5 ounces / year (+3).

Scale advantages and structural optimization, profitability hit a record high.

19Q2 gross profit margin 39.

9%, a month-on-month increase of 5.

1pct, and due to exchange gains, Q2 single-quarter financial expenses were -0.

500 million, net interest rate 28.

2%, a record high. Through the continuous expansion of the size of pump valves, there is still room for improvement in gross profit margin.