Linglong Tire (601966): Production and sales increase against the trend, 2019H1 performance exceeds expectations

The company released 2019 semi-annual report: 83 operating income.

1 billion (YoY + 14,74%), net profit attributable to mother 7.

2.5 billion (+ 38% YoY).

47%); of which the second quarter of 2019 achieved operating income42.

7.5 billion (+14 compared to the same period last year).

61%); net profit attributable to mother 4.

4 billion (+ 47% YoY).

15% quarter to quarter.

39%), the company’s performance increased significantly.

The tire production and sales have grown against the trend, and the growth logic has been continuously realized.

In the first half of 2019, domestic automobile production and sales were respectively completed at 1213.

20,000 and 1232.

30,000 units, with production and sales down 13.
.

7% and 12.

4%.

Against the background of industry demand prospects, the company produced 2906 tires in the first half of the year.

180,000 articles, an increase of 8 in ten years.

09%; 2757 tires are gradually sold.

750,000 articles, an annual increase of 7.

64%, achieved contrarian growth, mainly because: 1) domestic retail sales have achieved balanced growth, overseas retail sales in the United States, Europe, the Middle East and Central Asia, Asia Pacific, Central and South America have achieved sales growth of more than 10%.

2) In the supporting market, the company has successfully upgraded the main tires of FAW-Volkswagen Jetta, two main tires of Changan Ford Volkswagen, Renault electric vehicle tires andCivilian version of FAW Hongqi L5 national passenger car with run-flat tires.

The “5 + 3” strategy continues to advance, and the company will continue to grow in the future.

The foundation stone laying ceremony of the fourth Hubei Jingmen factory was held in July 2018. The first phase of the project is expected to be successfully put into operation by the end of the third quarter of 2019.

The company’s European Serbian factory also held a groundbreaking ceremony in March 2019. After the project is completed, the annual throughput of semi-steel radial tires can reach 12 million, the total steel radial tire throughput of 1.6 million, and engineering tires and agricultural radial tires of 20,000.article.

With the continuous construction of the company’s production capacity, it is estimated that the production capacity will reach 90 million in 2020.

Profit forecast: As the leader in the domestic tire industry, the company has obvious brand and supporting advantages. The continuous expansion of production capacity will help the company’s future performance 西安耍耍网 to grow steadily.

The EPS is expected to be 1 in 2019-2021.

29/1.

75/1.

97 yuan, corresponding to PE14.

6X / 10.

7X / 9.

5x, maintain “Buy” rating.

Risk warning: The price of raw materials fluctuates sharply, and the construction of new capacity is less than expected.

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