Great Wall Motor (601633): Sales and profit improve, and expected results break through upward

Great Wall Motor (601633): Sales and profit improve, and expected results break through upward
The performance of the company in 2018 was lower than expected: the company recently released the 2018 annual report, thereby achieving operating income of 992.3 billion, down 1 year.92%; net profit attributable to mother 52.0.7 million yuan, an increase of 3 in ten years.58%; gross profit margin 16.69%, down by 1 every year.74 units; net interest rate 5.37%, an increase of 0 every year.35 units.The company’s performance is lower than our expectation at the beginning of 2018. The preliminary results are as follows: (1) Influenced by the withdrawal of purchase tax concessions, the transformation of macroeconomic growth, and Sino-US trade frictions and other factors, the domestic single-month automobile sales increase in the second half of 2018The company has experienced continuous negative growth, and the company’s car sales have also been affected to some extent. (2) In order to boost car sales, the company increased its promotional efforts in the second half of the year to reduce the product’s gross profit margin. Price reduction promotions to protect sales volume have led to an increase in the decline in gross profit margin: In the context of a depressed automobile market, the company used price reduction promotions and red envelopes to boost sales.Annual company car sales 杭州桑拿网 in 2018 were 105.300,000 vehicles, which decreases by 1 every year.60%; of which, the Haval brand sold 76.610,000 vehicles, down 10 every year.07%; WEY brand 13.950,000 vehicles, an annual increase of 61.39%; Euler brand 3515 sedan; Fengjun brand 13.80,000 vehicles, an increase of 15 in ten years.16%. Through price reduction promotions, the company has achieved sales performance in a range of industries (According to the China Automobile Association, the actual domestic car sales in 2018 were 2,808.060,000 units, down 2 every year.76%), but also eroded profit margins and gradually increased interest rates.74 averages (Q3 and Q4 gross profit margins exceeded breakdown by 1 respectively.95% and 5.49%). The industry is picking up and merging new vehicle cycles. From 2019, the company’s sales volume and profit growth are expected 淡水桑拿网 to resume rapid growth: the accumulation of effects, the automotive industry is expected to enter the boom upward cycle in the second quarter.From 2019 1?Looking at the sales volume in February, the company’s single-month auto sales have recovered to positive growth ahead of the industry.With the gradual recovery of the industry, the company may be able to achieve faster sales growth while segmenting terminal discounts, and will continue to launch new models such as Haval F7x, WEY VV7 GT, WEY P8 GT, and Euler R2.It completed its sales target of 1.2 million vehicles in 2013 (an increase of 13 compared to 2018 sales).96%).The increase in the strength of terminal discounts will also help improve the gross profit margin of the products, and the company’s net profit is also expected to resume rapid growth. Investment suggestion: With the gradual recovery of the industry, the company’s automobile sales are expected to achieve steady growth, the profit margin may be significantly improved, and the performance is expected to return to a faster growth.We forecast the company’s full year earnings from 2019 to 2021 to be zero.69 yuan, 0.80 yuan and 0.93 yuan, return on net assets were 11.3%, 12.3% and 13.2%.Maintain “Buy-B” investment rating. Risk reminder: The macroeconomic downturn has caused car sales growth to be less than expected; the company’s new model promotion has fallen short of expectations.