Linglong Tire (601966): Sales increase against trend, gross profit of tires improves first-half results

Linglong Tire (601966): Sales increase against trend, gross profit of tires improves first-half results

Investment Highlights: Company Announcement: The company releases its 2019 semi-annual report, reporting a series of realized operating income83.

100,000 yuan (+14 compared with the same period last year).

74%), realizing net profit attributable to mother 7.

2.5 billion (+ 38% YoY).

47%), of which Q2 achieved operating income of 42 in a single quarter.

7.5 billion (+14 compared to the same period last year).

61%, +5.

96%), realizing net profit attributable to mothers4.

4 billion (+ 47% YoY).

15%, +54.

56%), the performance exceeded market expectations.

The unit price of tyres increased in Q2, and the cost decreased. The company’s single-quarter performance hit a record high.

The company’s tire output in the second quarter of 2019 was 14.61 million (YoY + 3.

99%, quarter +1.

11%), but due to the impact of the duration of the passenger car market, sales reached 13.77 million (+3 compared to the same period last year).

86%, QoQ -0.

33%).

After the integration of the domestic tire industry in the past three years, the domestic economic efficiency is low, the spindle with poor scale effects is gradually eliminated, and the tire industry’s operating rate has gradually increased. Therefore, some tire products have increased prices in the second quarter, supplementing the company’s optimized sales structure.The price increased by 10 over the same period last year.

31%; At the same time, the company’s operating costs have decreased, and the overall price of major raw materials such as natural rubber, synthetic rubber, carbon black, steel cord, and cord fabric has been reduced.

5%, since April 1, the increase rate has dropped from 16% to 13%. Since November 1, last year, the tire export tax rebate rate has been raised from 9% to 13%.
The company’s gross profit margin for the second quarter was 26.

18%, an increase of 2 per year.

66 units, an increase of 1 from the previous quarter.

95 singles are the first to improve the company’s performance excellence.

In addition, exchange gains and non-recurring items also have a positive impact on the company’s Q2 performance: the company generated a total exchange loss of 0 in the first half of the year.

230,000 yuan, of which Q2 is about 0 exchange gains.

3 trillion; non-recurring profit and loss was 0 in the first half.

710,000 yuan, of which Q2 contributed 0 performance.

37 ppm, mainly for government subsidies and investment income from trading financial assets.

The above two projects contributed a total of 0 performance.

6.7 billion.

The retail market has grown, and the production and sales have increased against the trend in the first half of the year. The projects in Jingmen and Serbia have proceeded smoothly.

In the first half of the year, the company maintained a capacity utilization rate of about 90% and achieved a production of 29.06 million tires (YoY + 8.

09%), sales of 27.58 million (+7 compared to the same period last year).

64%), while domestic auto production and sales increased by 13.
%.

7% and 12.

4%.
In the first half of the year, the Thai Phase III project and the Liuzhou project gradually increased the load and contributed significant performance increases. Reporting that Thailand Linglong and Guangxi Linglong achieved net profit respectively.
77, 0.

80 ppm, a year-on-year increase of 76% and 109%; at the same time, the company strengthened the development of retail markets in various regions, especially overseas retail. The company has achieved more than 10%Increased sales.

At the end of the third quarter of this year, 1 million sets of all-steel tires and 3.5 million sets of semi-steel tires in Phase I of Hubei Jingmen will be put into production, which will effectively increase the company’s market share in central China; the Serbian project will also be in March 2019.It is planned to form an annual production capacity of 12 million sets of semi-steel tires, 1.6 million sets of all-steel tires, 20,000 sets of engineering tires and agricultural radial tires. The first phase of the project is expected to be put into production by the end of 2020.

The successive commissioning of Jingmen and Serbian factories will become the company’s continuous growth driver.

Support FAW-Volkswagen, continue to strengthen brand building, strive for fair incentives and show confidence.

In the first half of the year, the company made another breakthrough in the supporting market, successfully supporting the main tires of FAW-Volkswagen Jetta, the main tires of Changan Ford Ferris, and the civilian-run gas-deficient tires of the FAW Red Flag L5 passenger car.progress.

With the company’s continuous deep cultivation and innovation in core technology research and development, emerging market development, brand value building, and diversified services, the company has successively entered the supporting facilities of Audi, Volkswagen, GM, Ford, Renault Nissan, Red Flag, Geely, Great Wall and other first-class automobile factoriesThe supply system reflects the improvement of the company’s brand power and the optimization of its product structure.

In the first half of the year, the company repurchased 22 million shares for equity incentives. While boosting market confidence, it 四川耍耍网 gave the company’s backbone and core management, technology, and research and development personnel partial equity, promoting the common growth of employees and the company, and achieving long-term sustainable development of the company.

The company’s controlling shareholder, Linglong Group, promised not to reduce its shareholding in 2019, demonstrating the leadership’s confidence in the company’s future development prospects.

Earnings forecast and investment grade: Maintaining the profit forecast for 2019-2021, the net profit attributable to mothers is expected to be 15.

01, 17.

48, 20.

05 ppm, corresponding to PE 15X / 13X / 11X, maintaining the “overweight” level.