Inner Mongolia First Machine (600967): Steady Growth in the First Three Quarters and Full Orders for Military and Civilian Products

Inner Mongolia First Machine (600967): Steady Growth in the First Three Quarters and Full Orders for Military and Civilian Products

Event: The company released the third quarter report of 2019, and achieved operating income of 75 in the first three quarters.

3.6 billion (decade +5.

2%), net profit attributable to mother 4.
.

21 ppm (decade +20.

5%), with a budget benefit of 0.

25 yuan / share.

Comments: (1) The company achieved operating income of 75 in the first three quarters.

3.6 billion, an increase of 5 every 杭州桑拿 year.

2%, of which in the third quarter achieved operating income22.

22 ppm, an increase of ten years6.

9%, mainly due to the increase in products delivered in the reporting period for acceptance and confirmation of revenue compared to the same period last year.

(2) The company achieved net profit attributable to its mother in the first three quarters.

21 ppm, an increase of 20 per year.

5%, of which Q3 achieved net profit attributable to mother 0.

90,000 yuan, an annual increase of 43.

8%.

The main reasons why the growth rate of net profit attributable to motherhood is greater than the growth rate of revenue are: a) the decrease in sales expenses by 30.

8%, mainly due to savings in sales department expenses during the reporting period; b) Financial expenses decreased compared to the same period of the 深圳桑拿网 previous year, mainly due to deposit interest rate swaps during the reporting period; c) Investment income increased by 54.

4%, mainly due to the increase in wealth management income due during the reporting period; d) Asset impairment losses continued to decrease by 95%.

6%, mainly due to the decrease in bad debts in invoice receivables and inventories during the reporting period.

(3) In terms of key ratios, a) gross profit margin decreased by 1 compared with the same period last year.

2pct, mainly due to changes in product structure and other reasons; b) The sales expense ratio decreased by 0 compared with the same period of the previous year.

2pct, mainly due to the cost savings of the sales department during the reporting period; c) The management expense ratio decreased by 0 compared with the same period of the previous year.

6pct, mainly due to the fact that the 2018H1 R & D expenses were not separately listed from the management expenses; d) The R & D expense rate increased by 0 compared with the same period of the previous year.

2pct, mainly due to the increase in R & D expansion; e) Financial expense ratio, which decreased by 0 compared with the same period last year.

6pct, mainly due to interest rate swaps on deposits during the reporting period.

(4) In terms of assets and liabilities, a) Inventories increased by 75 at the end of the period compared with the beginning of the period.

1%, mainly due to the increase in unfinished deliveries during the reporting period, indicating repeated redundant orders; b) accounts receivable, which increased by 246 at the end of the period compared with the beginning of the period.

8%, mainly because the receivables have not yet reached the payback period; c) settlement of accounts, the end of the period increased by 130 compared with the beginning of the period.

9%, mainly due to the purchase payment outstanding payment period in the reporting period.

(5) In terms of cash flow, the net cash flow from operating activities decreased by 74 each year.

6%, mainly due to the decrease in product repayments and advance receipts during the reporting period.

The demand for 8X8 wheeled armored vehicles is huge.

79% of the current tracked / wheeled armored vehicles are old equipment developed in the last century, and the service time is too long, and the upgrade task is urgent.

Countries around the world agree that 8×8 wheeled armored vehicles are the most ideal combat platform among wheeled armored vehicles.

At present, the demand for wheeled armored vehicles by medium-sized synthetic brigades has reached several. At present, the total number of 8 × 8 wheeled armored vehicles is 1020, which forms a huge gap between the actual demand and the 8 × 8 wheeled armored vehicles.Installed.

The demand for the 99 series main battle tanks reached 1,000.
Although the number of main battle tanks in the Chinese Army has decreased, they are mostly old equipment. The third generation tanks account for only about 50%. As the third generation main battle tanks, the 99 series tanks will gradually realize the old 59 type.Upgrades of main battle tanks such as Type 79 and Type 88.
The current heavy synthetic brigade needs about 3,000 main battle tanks. At present, the army has a total of 99 main battle tanks and 600. If it is completely replaced, it corresponds to a space of 1,000 series of 99 series main battle tanks.

The 15-type light tank is expected to be installed on another scale as a performance growth point.

The Type 15 light tank is a new type of tank with maneuverability, strong firepower, replaced protection capabilities, and a high level of informatization, which can effectively improve our army’s plateau and southern hilly paddy fields and other specific environments.Level.

The 15-type light tank has a special strategic positioning and restores the shortcomings of our army’s existing main battle tanks in terms of passage across the region. It is expected to expand installation in the southwest and central regions, becoming another company’s performance growth point.

The outlook for the foreign trade market is promising.

Taking tanks as an example, long-term tanks have a reasonable price and high cost-efficiency ratio, and have been widely favored.

MBT3000 is positioned as a high-end foreign trade product, and its combat performance is enhanced compared to MBT2000.

At present, the Pakistani Army has selected the Chinese MBT3000 as the new generation main battle tank, and it is estimated that the purchase volume can exceed 100.

China is expected to obtain more orders for MBT3000 and other armored vehicles in the future, and its foreign trade prospects can be expected.

The private goods business is expected to benefit from the “public to iron” policy to achieve substantial growth.

China Railway plans to purchase 21 in the next three years.

60,000 railway wagons have been purchased over 100 billion yuan.

The continuous advancement of “transit railway” is everywhere, and the railway freight industry is expected to maintain stable growth for a long time.

As the main supplier of railway vehicles, the company will continue to benefit from the increase in total iron purchase orders.

Investment suggestion: The company is a leading manufacturer of armored vehicles such as tanks in the country. The military product business benefits from upgrading and replacing old models and the growth of foreign trade orders. The civilian product business enjoys the “transition of iron” policy bonus.Net profit 6.

16/7.

21/8.

51 trillion, EPS 0.

36/0.

43/0.

50 yuan, corresponding to PE 29/25/21 times.

Taking into account the company’s industry leading indicators and referring to comparable listed companies, we use EPS forecasts for 2019 to give 34 times PE estimates with a target price of 12.

24 yuan.

Covered for the first time, giving the company a “Buy” rating.

Risk reminders: 1) At present, the total number of main battle tanks is increasing, and the incremental market is not obvious. The order mainly replaces and replaces old equipment. If the replacement speed exceeds expectations, it will affect the company’s main battle tank business income; 2) Foreign trade orders are uncertainHigh nature, may cause the company’s overseas business growth to be unsustainable