Zhejiang Dingli (603338): 1Q19 results meet expectations and expect demand to accelerate in the second quarter

Zhejiang Dingli (603338): 1Q19 results meet expectations and expect demand to accelerate in the second quarter

The 1Q19 results were in line with expectations. Zhejiang Dingli announced the 1Q19 results and realized revenue3.

80,000 yuan, an increase of 23 in ten years.

4%, 天津夜网 realizing net profit attributable to the parent company1.

0 million yuan, an increase of 44 in ten years.

1%, the performance is in line with our expectations.

Revenue growth remained stable, and gross profit margin increased.

The company’s 1Q19 revenue growth rate was 23.

4%, short-term revenue growth, we estimate that it may be affected by the weather in East China and the US distributors to digest inventory.

We judge 1Q19’s 天津夜网 domestic market sales growth rate is relatively high, accounting for 44% of revenue.

Which 1?
The growth rate in February was more than flat, and the sales growth rate in March rose significantly.

Due to the company’s subjective strategic adjustment and CMEC’s inventory digestion period in the first quarter, we judge that from April, overseas demand will gradually increase.

The company’s gross profit margin rose in the first quarter of 19 in the short term.

4ppt to 42.

9%, mainly due to the low gross margin due to estimates in the same period last year. At the same time, the price increase in overseas markets began in May last year.

The expense ratio rose slightly during the period, and the net profit margin increased.

The company’s sales expense ratio drops by 0 every year.

1ppt, the management expense ratio (including R & D expenses) exceeds 0.

6ppt, the financial expense rate increases by 0 every year.

7ppt to 1.

6%, mainly due to increased exchange losses due to exchange rate changes.

The company’s investment income increased by 3.03 million to 3.88 million yuan, mainly due to the increase in investment income of associates, and the net profit margin increased by 3.

8ppt to 26.


Cash flow from operating activities improved.

The company’s prepayments increased by 3.98 million yuan from the beginning of the year, mainly due to the increase in stocking in the initial period.

Cash for operating activities is at least -34.36 million yuan, and 23.24 million yuan is replaced in one year.

The development trend looks forward to the new arm type products getting market recognition in 2019.

We estimate that this year’s arm capacity is about 700?
800 units, it is estimated that half of the production capacity will be used to produce new arm-type products designed in cooperation with Italy.

Considering the strong demand for the arm type and the market in short supply, we believe that the timing of Dingli’s new arm type entering the market is better.

Once the new arm type is recognized by the market, the company’s comprehensive competitiveness will reach another level.

Earnings forecast remains at 2019 / 20e EPS forecast 2.


63 yuan unchanged.

Estimates and recommendations The company currently has a sustainable response to 2019 / 20e 27.


7x P / E, maintain target price of 95 yuan, corresponding to 35x 2019e target P / E, potential increase of 26.
5%, maintaining the recommended level.