TBEA (600089): 3Q performance is in line with expectations
Performance review Maintaining outperforming industry 1-3Q19 results in line with our expectations The company issued 1-3Q results, reported and the company achieved operating income of 254.
48 ppm, a decrease of 9 per year.
83%; net profit attributable to mother 16.
68 ppm, a decrease of 都市夜网 13 per year.
The corresponding EPS is 0.
Of which 3Q operating income was 83.
96 ppm, a decrease of 12 per year.
70%; net profit attributable to mother 6.
20 ppm, an increase of 20 in ten years.
62%, performance is in line with our expectations.
Development Trend New Energy Industry and Supporting Projects: Gradually reducing prices dragged down performance, and sector performance gradually changed.
It is said that the subsidiary Xinte Energy announced that during the period 1-3Q19, its continuous average sales price was 10 from the same period last year.
0.9 million yuan / ton fell 40% to 6.
05 million / ton, resulting in its 1-3Q19 net profit is expected to be only 2.
3 billion, a year-on-year decrease of 64% -68%.
In our opinion, although the domestic demand for photovoltaics has been slower than expected since 3Q, overseas demand has been strong. Demand in 4Q19-20 will be better, and the price will gradually decrease. On this basis, the company has accelerated 3 this year.
6Initial / annual high-purity expected industrial upgrading project, and development of high-quality machines, performance to promote continuous repair.
Power transmission and transformation business: orders in hand support growth.
The segment mainly includes transformers, wires and cables, and complete sets of power transmission and transformation projects. During the 1H19 period, the company signed nearly 111 domestic power transmission and transformation contracts.
US $ 600 million. The international integrated system integration business is executing unrecognized revenue and the contract value of pending projects exceeds US $ 6 billion, providing support for performance growth.
Profit side: gross profit margin and net profit margin increase and appreciation respectively2.
Company 3Q19 gross profit margin 19.
8%, a higher improvement from the low base in the same period last year.
5ppt, but slightly lower than the chain.
9ppt; During 3Q19, sales, management, R & D, and financial expense ratios were 6.
8%, the overall period expense ratio is 12.
7%, an increase of 3 per year.
4ppt, an increase of 0 from the previous month.
2ppt; 3Q19 net interest rate 7.
4%, an increase of 2 per year.0ppt, an increase of 0 from the previous month.
Earnings forecasts and estimates We maintain net profit for 2019/202023.
11 ppm / 26.
The forecast of 6.4 billion remains unchanged.
The current consensus is 10/2019/2020.
4 times / 9.
0 times price-earnings ratio.
Considering the slower-than-expected PV demand since 3Q and the slower-than-expected progress of UHV construction, we have lowered our target price by 12% to 7.
50 yuan, corresponding to December 2019/2020.
1x / 10.
5 times price-earnings ratio, which has a 16% upside compared with the current one, maintains outperforming the industry level.
Risks PV industry demand is lower than expected, transmission and transformation orders advance less than expected, and intensified competition has led to a decline in profitability.