Addison Precision (603638): Exceeds expectations Explosion hammer + hydraulic two-wheel drive
Event: On April 19th, Eddie released the 2019 first quarter report. According to the announcement, the company achieved operating income in the first quarter3.64 ppm, an increase of 68% in ten years; net profit attributable to mothers to zero.890,000 yuan, an increase of 74 in ten years.5%, the performance exceeded market expectations. Core point of view performance: Benefiting from the hot sales and operation methods of construction machinery, the restrictions of blasting supervision, the company’s breakers, especially sledgehammers, have been in the situation of donor substitution seeking; meanwhile, the company’s inventory reached 4.About 1 billion (previously increased by 93%), according to the company’s historical inventory structure, 50-60% of which are issued goods, semi-finished products, etc., indicating that the company’s production and sales are booming.In terms of profitability, Q1’s gross profit margin returned to a reasonable level of about 43%; construction machinery is an industry to be measured, and the release of the company’s scale is expected to increase the gross profit margin steadily. Broken Hammer: The company is the first domestic brand of Broken Hammer (15% market share, 60% of sledgehammers are listed on the market), there is almost no correlation; the proportion of hammers in the industry will increase: (1) economic attributes, the hammer can improve distributionThe profit level of the business owner and the owner (the means of the dealer to adjust the profit and promotion, the cost of the Taiwan shift is 40% higher than the normal working conditions); (2) policy restrictions and efficiency increase, under the control of explosives, sledgehammers are available for job hunting; traditional styleOperating methods such as picks are inefficient, and excavators are equipped with hammers as the main method of operation; (3) More than 35% of the divisions are currently available, and the current ratio of existing hammers is still 20%; the city’s share has increased: (1) under the advantage of cost-effectiveness,Foreign companies are not competitive, and Japanese and South Korean brands switch to Eddie; (2) Hammers are concentrated in the OEM factory, and the branded hammers will damage the excavator, so the warranty will no longer be provided. Eddie ‘s rich supporting suppliers; (3) No rivals,The release of production capacity will increase the market share; pump valve + motor line: the pump valve has been equipped with the first domestic brand, and is currently actively adapting to other brands; walking motor is the company’s exclusive product, the value is acceptable),import替The generation trend is determined; it has been adapted so far, and it is expected to be released in large tonnage in the second half of 19 years; space measurement: in the short and medium term,The average market share and hammer ratio of the company in the medium and long-term reach 30%, which corresponds to about 20 billion in revenue space; (2) Hydraulic pump valve + motor: The front-loading market is around 12 billion, assuming that the long-term future reaches 20-30%The market share then corresponds to 3.6 billion revenue space; (3) Profit: According to the current profit level, corresponding to 1 to 1.3 billion profit space; financial forecast and investment advice: We predict that the company’s eps in 2019-2021 will be 1.31/1.67/1.74 yuan, we are optimistic about the localization of core components by the OEM and the company’s advantages in terms of technology and 杭州桑拿网 user resources.Based on estimates from comparable companies, we believe that the current company’s reasonable estimate is 26 times P / E in 2019, with a corresponding target price of 34.06 yuan, maintaining the overweight level. Risk warning: macroeconomic downside risks, excavator demand is less than expected, overseas business development is less than expected, the company ‘s product penetration rate is less than expected, raw materials and exchange risks.