Hongfa Co. (600885): HV DC overseas has gradually increased its traditional automobile business

Hongfa Co. (600885): HV DC overseas has gradually increased its traditional automobile business

The company released the third quarter report for 2019. In the first three quarters, the company’s revenue was returned to net profit, and the net profit after deduction was increased by 1.

87%, -5.

54%, -4.

80%, of which Q3 increased by 2.

54%, -9.

06%, -7.


The company’s general-purpose business has developed steadily, with multiple business markets occupying the world’s largest market share. New businesses such as high-voltage DC and low-voltage electrical appliances already have a certain global competitiveness and are becoming a new growth force.

We are optimistic about the company’s long-term competitiveness and maintain a highly recommended level with a target price of 31-32 yuan.

Performance growth was in line with expectations.

In the first three quarters of 2019, the company’s revenue was attributed to net profit, and the net profit after deduction was 51.

48, 5.


26 trillion, each increase by 1.

87%, -5.

54%, -4.


Among them, Q3 income is attributed to net profit, and net profit after deduction is 17 respectively.

41, 2.

01, 1.

9.2 billion, an increase of 2 each year.

54%, -9.

06%, -7.


Profitability Analysis.

Q3’s consolidated gross profit margin was 40.

96%, the same, the chain rose by 0.

55, 2.

In 42 samples, the increase in gross profit margin was due to the impact of exchange rate changes, conversions, and the increase in the proportion of high-voltage DC and other businesses with high profitability.

Q3’s sales, management, and financial expense ratios were 5 respectively.

28%, 15.

54%, -0.

99%, rising by 0 each year.

04, 0.

51, 0.

02 units.

HVDC continued to shrink overseas, and the drop in automotive relays narrowed significantly.

In the first three quarters of 2019, the company’s power relays were shipped20.3 ‰, a decline of 7 per year.

7%, automotive relays are gradually shipped 5.

500 million US dollars, a decline of 20% each year, power relays continue to issue 1.1 billion US dollars, each increase of 21%, high-voltage DC relay conversion investment3.

US $ 900 million (excluding US $ 100 million of 杭州夜网论坛 Hongzhou Cycle Series), exceeding 39% per year, and cumulative shipments of low-voltage appliances4.

600 million, an increase of 11% in ten years.

The global competitiveness of the high-voltage DC relay business is outstanding. At present, Mercedes-Benz, Volkswagen, Land Rover, Porsche and other overseas benchmark customers have gradually realized small-scale delivery. The Tesla project has completed production line identification in August and started mass production in October.Products have been shipped to the United States, becoming the main supplier of its domestic factories.

Keeping within the limits of expenditures, we will expand steadily and expand our acceleration.

The company is forming a relevant industrial device business scale and the domestic business is still expanding. Ningbo Jinhai, Zhangzhou Hongfa,四川耍耍网 Xiamen Haicang and other projects have been transformed. Zhejiang Wufeng Capacitor, Zhejiang Zhoushan Automotive Electronics Base is under construction, Indonesia and other overseasSpeed up manufacturing layout.

The company’s overseas business accounts for nearly 40%, and has a long history of business management. In the United States, European business has been localized earlier.

In 2018, the company established the Overseas Investment Division, and it is expected that the related mergers and acquisitions and integration will also accelerate.

In 2019, the company started the expansion of the primary base in Germany, which will support the company’s development of high-voltage DC and low-voltage electrical appliances in Europe.

Investment recommendation: Maintain a highly recommended rating with a target price of 31-32 yuan.

Risk Warning: The continued economic downturn affects the company’s product demand, the capacity expansion progress is less than expected, and exchange rate changes affect the company’s overseas business profitability.