Hisense Electric (600060): Performance at the bottom inflection point Toshiba TVS breaks for the better

Hisense Electric (600060): Performance at the bottom inflection point Toshiba TVS breaks for the better

Key points of investment: The growth rate of the interim report revenue performance is in line with expectations, and after excluding 佛山桑拿 TVS consolidation, the profit growth rate was lower than expected.

The company achieved operating revenue of 15.1 billion in the first half of 2019, an increase of 7 per year.

8%, achieve net profit attributable to mother 0.

62 trillion, a decrease of 81 a year.

5%, corresponding to EPS0.

05 yuan / share, the overall revenue / profit growth in the interim report was in line with expectations.

Among them, the operating income in the second quarter was 7.5 billion yuan, a year-on-year increase of 20.

7%, net profit attributable to mother 0.

35 trillion, down 45 a year.

3%.

若还原东芝TVS公司并表影响(去年同期TVS公司未在并表范围内,非同一控制下企业不转换调整),上半年公司实际实现营业收入136亿,增长下降3%,归母净利润 1.

49 ppm, a year-on-year decrease of 57%, so after excluding the impact of the consolidation, the profit growth rate was lower than expected.

The consolidation of TVS led to revenue growth, and the actual income in the first half of the year after the reduction decreased by 3% each year.

In the first half of 2019, the company’s revenue increased by 8% each year, and single Q2 revenue increased by 21%, mainly due to Toshiba TVS’s consolidated revenue of US $ 1.5 billion. After the restoration, the company’s actual revenue decreased by 3%, mainly due to the merger of black electricity.The sluggish industry demand + the impact of low prices of Internet brands, the domestic sales of Hisense TVs continued to shift.

At least, at present, LCD TVs are entering the late stage of maturity, and the scale of technological innovation has not changed much. It is difficult to stimulate consumer demand. According to Aowei Cloud Network data, the black channel industry ‘s omni-channel retail sales in the first half of 2019 decreased by 2%.

72%; the average retail price of black electricity in the first half of the year decreased by 10 year-on-year.

03%; resulting in the total retail sales of black electricity in the first half of the year fell by 12.

48%; In addition, under the impact of cross-border disruption by Internet TV brands such as Xiaomi, the pressure on the income side of traditional black power companies penetrated. In the first half of 2019, Xiaomi’s LCD TV online retail sales reached 3.01 million units, each time + 77%;Hisense LCD TV online retail volume is only 1.24 million units, 5% a year. At present, Xiaomi Line’s market share accounts for nearly 30%, ranking first.

Profitability improved less than expected, and Toshiba TVS has gradually improved.

Panel prices have continued to fall since the beginning of 2019, but the company’s profitability has improved less than expected.

In the first half of 2019, the company’s overall gross profit margin was 15.

77%, a year up 0.

87 pcts, but the net margin is only 0.

41%, we reduced the impact of Toshiba TVS’s consolidated net profit of 87 million, and the company’s actual net profit margin was only 1.

09%, ten-year average 1.

38 pcts, indicating that the company improved its profitability in the first half of the year and in the process of the simultaneous decline in upstream panel and terminal sales prices; the good change is that Toshiba TVS has gradually changed and improved. After the overseas channel conversion is completed, Toshiba TVS is expected to turn a profit in 2020.

In the second half of 2019, the conversion of alternative channels will be completed, and the cost will be more reduced. Combined with Toshiba’s technology accumulation and brand value in the field of black electricity (Hisense + Toshiba TV in the first half of 2019, the total sales share in the Japanese market reached 20.

9%, has surpassed Sony and Panasonic).

Profit forecast and investment rating.

We lower the company’s profit forecast for 2019-2021, and expect net profit to be 2 respectively.

8.1 billion, 3.

9.3 billion and 5.

3.4 billion (previous average 6).

1.4 billion, 7.

$ 6.7 billion and 9.

US $ 2 billion, exceeding 28%, an increase of 40% and an increase of 36%, corresponding to EPS of 0.

21 yuan, 0.

30 yuan and 0.41 yuan, corresponding to PE 37 times, 26 times and 19 times.

As of August 9, 2019, the company’s market value was only 9.9 billion, including monetary funds of 2.9 billion (data on June 30) + wealth management of 8.3 billion (data on June 30), only 0.

70 PB, maintain “overweight” investment rating.