Top Group (601689): Automotive demand growth Q2 performance exceeds expectations

Top Group (601689): Automotive demand growth Q2 performance exceeds expectations

The output of customers decreased and the depreciation expenses increased. The results are expected to be advanced on July 16. The company released an interim report performance forecast. The company expects to realize net profit attributable to mothers in the second half of 20192.


200 million, 49% above the real interest rate?
54%; net profit attributable to mother was 0 in the second quarter.


0.6 billion, lower than expected results.

We believe that the company’s initial performance is gradually increasing due to the increase in sales of downstream customers, increasing depreciation expenses and increasing price pressure.

We believe that the company is a leader in the domestic NVH industry, and products such as forged aluminum control arms have been supplied to Tesla, BYD and other new energy vehicle leaders to make full use of the trend of electrification.

The company’s electronic vacuum pump has been developed to the third generation, and domestic alternative space is large.

Sometimes short-term problems are caused by reduced customer sales, but we are still optimistic about the company’s long-term development.

The company is expected to achieve EPS0 in 19-21.

55, 0.

60, 0.

67 yuan, maintain “Buy” rating.

The output of major customers has decreased, depreciation expenses have increased, and performance has been under pressure in the first half of the year.The continuous increase in output from downstream customers has led to insufficient production capacity and significant growth in revenue.

Due to the sluggish sales of OEMs, the pressure on cost control has increased, and the company’s price reduction pressure has decreased, resulting in a decline in revenue and gross profit margin.

At the end of 2018, the company’s construction in progress was transferred to fixed assets7.

60,000 yuan, the increase in depreciation expenses further reduced the gross profit margin.

We expect the company’s performance to be better than the first half if the sales volume of major customers improves in the second half.

Looking forward to next year, the company’s performance is expected to benefit from factors such as Tesla’s localization and improvement in industry sales.

The lightweight chassis business supplies Tesla, which is expected to fully benefit from the lightweight chassis products such as the forged aluminum control arm of the electric tide company have entered Geely, BYD, Tesla and other customers.

The demand for new energy vehicles for lightweighting exceeds that of traditional cars. The lightweight chassis business helps to benefit from the rapid development of new energy passenger vehicles.

In 2020, after Tesla is localized, it is expected to bring more orders to the company, and at the same time, Tesla Halo is expected to attract other new energy vehicle customers for the company.

The company initially plans to invest USD 5 billion in the development of lightweight chassis business. The automotive lightweight business has a bright future. The company has an earlier layout and continues to expand, injecting momentum into the company’s medium- and long-term growth.

According to the company’s annual report, electronic vacuum pumps have been upgraded to third-generation products, which have been supplied to many customers one after the other, and are currently in the ramp-up phase.

IBS (Intelligent Brake System) will reach the production time extended to 2022.

Grasp the trend of lightweight development and maintain the “Buy” rating. We 杭州桑拿网 consider the company to be the leader in the domestic NVH industry and follow the steady growth of high-quality customers. Actively deploy lightweight chassis business, which has been supplied to Tesla, BYD, etc., and is expected to fully benefit from electrification;The domestic development of electronic vacuum pump products is underway.

Taking into account the decrease in sales of customers in 19 years, we estimate the company’s net profit attributable to mothers to be 5 in 19-21.

81, 6.

37, 7.

1.1 billion (down 29.

3%, 29.

3%, 29.

0%), the corresponding EPS is 0.

55, 0.

60, 0.
67 yuan, comparable company’s 19-year average valuation of 17 times PE, considering that the company’s short-term performance is trapped by the growth of customer sales, but the future 西安耍耍网 has a broad prospect.
23 times PE estimate, adjust target price to 12.


65 yuan, maintain “Buy” rating.
Risk reminder: R & D of emerging business is not up to expectations, overseas business is affected by Sino-US trade friction, and the industry’s prosperity is falling.