Saurer Intelligence (600545): The gross profit margin has improved and the promised profit has been completed

Saurer Intelligence (600545): The gross profit margin has improved and the promised profit has been completed

Saurer Intelligence released its 2018 annual report and achieved operating income of 92.

200 million, an annual increase of 5.

8%, net profit attributable to shareholders of listed companies8.

10,000 yuan, an annual increase of 23.

1%, non-net profit attributable to shareholders of the listed company.

6.7 billion, an annual increase of 18.

2%.

The performance was in line with expectations, and the promised profit was successfully completed.

The operation of the industry is basically stable, with emphasis on developing emerging markets.

In 2018, the enterprises above the designated size of textile machinery realized 911 of textile machinery revenue.

6.9 billion, an increase of 8 over the same period last year.

8%, total profit 68.

3.3 billion, an annual increase of 5.

1%, the industry growth rate has improved compared to 2017, but the overall operation quality is good.

Saurer Intelligence has focused on developing emerging markets such as Uzbekistan and Vietnam, and has performed well in these emerging markets, with bilateral growth rates of 47 in Uzbekistan and Vietnam.

6% and 20.

4%.

In the future, the spinning industry will continue to shift from China’s coastal regions to emerging economies such as Xinjiang, India, Uzbekistan, and the company will continue to enjoy the orders brought by these incremental markets.

Gross margin 26.

5%, continue to implement the strategy of reducing costs and increasing efficiency.

The average gross profit margin in 2018 was 26.

5%, up 2 by 2017.

0pct, of which the gross profit margin in the fourth quarter was 33%.

The improvement in gross profit margin is mainly due to the company’s active implementation of supply chain integration plans, screening of high-quality suppliers in China, India and other regions to reduce procurement costs.

At the same time, in terms of sales, we implemented major customer projects, focusing on and maintaining high gross profit orders.

The gross profit margin in the fourth quarter was significantly higher than that in the first three quarters, which was mainly due to the increase in high value-added business in the fourth quarter revenue structure, which involved higher gross margins of software and special products, thereby improving the gross profit margin of Saurer Intelligent in the fourth quarter.

Successfully complete the promised profits and develop overseas and domestic customers.

In 2017, Saurer borrowed money from Xinjiang Urban Construction, and the betting performance in 17-19 was 5 respectively.

83/7.

66/10.

USD 3.0 billion, according to the gambling caliber, Saurer’s actual net profit in 17 years6.

8.4 billion yuan, a completion rate of 117%, the actual completion in 18 years8.

6.7 billion, with a completion rate of 113%, which has been exceeded for two consecutive years.

In addition to the expansion of overseas customers, Saurer has also received a lot of goods in terms of domestic customer development. It is understood that Saurer has launched in-depth cooperation with well-known domestic spinning companies such as Blum Oriental, Huafu Yarn Spinning, Zhongtai and so on.Will continue to complete promised profits.

Operating cash flow was slightly pressured, and overall risk was controllable.

Saurer’s net operating cash flow for 2018 was -10.

4.3 billion, a decrease.

The relationship between the decline in operating cash flow and the payment method of spinning machines. Due to the large value of spinning machine equipment, customers often use financing channels such as bank loans during the procurement process.The client’s financing progress has led to an increase in the company’s receivables and a decrease in cash flow.However, the potential large customers of these customers have a good credit history, the financing project status is normal, and they will gradually expand into place in the later stage, so the overall risk may be controllable.

The construction of the second phase of Litai started, and the income from related transactions was 25.

400 million yuan, accounting for 27.

4%.

According to the company announcement, in the middle of 2018, revenues from Xinjiang Litai, Kuitun Litai and LT Textile International totaled 25.

400 million yuan, accounting for 27 of 2018 revenue.

4%, the proportion of related party transactions has increased from 2017.

Mainly because the construction of the second phase of the Litai project started in 2018, the equipment purchase amount increased, which led to a significant increase in Saurer’s intelligent related transactions in 2018.

It is expected that the connected transactions will remain at the level of 20% in 2019-20, and will decrease year by year in the future.

R & D drives innovation and continues to increase market share.

Saurer R & D expenses in 20184.

75 trillion US dollars, an annual increase of 53%, and the proportion of research and development expenses has further increased.

Continuous R & D investment also makes Saurer the forefront of the industry in product innovation. The company’s integrated quality control, highly converted parts and automation functions, and Autocoro and BD rotor spinning machines have become the world’s leadingmachine.

Excellent 杭州桑拿 performance, it is expected that the market share of products such as carding, semi-automatic air spinning, vortex spinning, and spinning frames will increase.

Performance forecast and investment advice.

We believe that Saurer will continue to benefit from 1) the transfer of cotton yarn industry to countries along the Belt and Road in Xinjiang and Central and Western Asia; 2) the increasing demand for high-end automation and intelligent textile machinery from spinning mills;In large-scale markets, Saurer is expected to significantly reduce procurement, labor costs, and improve gross profit margins.

Based on the above three points, Saurer Intelligence forecasts 98 revenue in 2019.

200 million yuan, net profit attributable to mother 10.

300 million yuan, corresponding to PE 14.

4 times, given a level of prudent recommendation.

Risk reminder: Cotton yarn production capacity transfer progress gradually exceeds expectations, high-end spinning machinery is gradually lower than expected, foreign currency exchange rate changes, and the trade war continues to escalate.