McGmitter (002851) 2019 First Quarterly Report Review: Platform Advantages Brewing Results Continue to Increase

McGmitter (002851) 2019 First Quarterly Report Review: Platform Advantages Brewing Results Continue to Increase
Core Views The company released the 2019 first quarter report, achieving net profit attributable to mothers of zero.580,000 yuan (ten years +138.67%).The company lays out several high-quality and high-growth tracks. Based on its own technology and customer advantages, the company acquires minority shareholders’ equity in core assets, which is expected to maintain rapid growth.Maintain 2019-2021 EPS forecast1.03/1.30/1.46 yuan (supplemented by the forecast in 2021). The reasonable estimate range for 2019 is 35x-40x. Maintain the “Buy” rating. Performance continued to grow rapidly, entering the fast track of development.The company released the first quarter report of 2019 and realized operating income7.740,000 yuan (ten years +101.39%), net profit attributable to mother 0.580,000 yuan (ten years +138.67%), reaching the upper limit of the forecasted growth rate range.At the same time, the company’s cost control ability improved during the period of rapid growth in performance, the cost during the reporting period was reduced by 15%, and the sales / management / financial expense ratio was -1 per year.68% /-1.63pcts / + 0.03 pcts, R & D expenses increase by 36 every year.58% to 67.46 million yuan.Net operating cash flow was 1.69 trillion US dollars, benefiting from better reporting of potential customer repayments and discounted bills compared to the same period last year and an increase of 4629 at the same time.12%. Aiming at high-growth industries, demand is building for bottom results.The company’s main layout is several downstream industries that have high growth rates or are about to usher in an industry inflection point: smart bathrooms are undergoing an accelerated penetration period internally, and the sales growth rate is expected to exceed 100% in 2018; the frequency conversion of home appliances and new energy passenger carsHigh-speed growth, railway exchanges are expected to usher in a huge investment of more than one trillion US dollars in three years, the domestic PMI resumed and promoted the continued improvement of industrial control, and the promotion of 5G construction to drive demand for related equipment.Under the company’s diversified layout, the overall demand is improving and its own technology and customer advantages are 都市夜网 better. It will continue to drive rapid growth in performance in the future. The acquisition of minority equity in core assets has long-term positive profitability.In September 2018, the company completed the acquisition of Jardine Sanitary, Shenzhen Driven, and Shenzhen controlled minority equity. The shareholding ratio increased from 52% / 41% / 54% to 86% / 99.7% / 100%, and consolidated since September.The above companies are facing high-end industries such as smart bathrooms, new energy vehicle electric drives, and rail transit air-conditioning control products. The three subsidiaries’ 2018 performance commitments are 7100/5500/13 million yuan, and the actual completion amounts are 7476/9188/1414. Ten thousand yuan, the over-completion rate reached 5, respectively.3% / 67.1% / 8.8%.At the same time, the company issued an announcement on the conversion of convertible bonds 武汉夜生活网 and the further acquisition of the remaining 14% minority shareholders’ equity in Jardine Bathroom. The company intends to raise 6 through convertible bonds.5.5 billion yuan, of which 1.50,000 yuan is intended to be used to acquire 14% equity of Yiyihe Bathroom (if completed, the company will hold 100% equity of Yiyihe).The performance promises of the three subsidiaries for 2019 are 95 million / 70 million yuan / 18 million yuan respectively, and the company intends to continue to acquire minority shareholders’ equity in Jardine Sanitary Ware, which will build a bottom line for 2019 and maintain rapid growth. Risk factors: The production and sales of new energy vehicles are lower than expected; the demand for inverter home appliances and smart home appliances is weak; the progress of rail transit construction is weaker than expected; the manufacturing boom is down. Investment suggestion: The company relies on its own technology platform advantages, acquires a good track, good customer assets, and diversified layout advantages to merge and acquire minority stakes in core assets. The performance is expected to continue to maintain a high growth rate and maintain the company’s net profit attributable to its mother in 2019-2021.Forecast 3.21/4.08/4.57 trillion, maintaining 2019/20/21 EPS forecast1.03/1.30/1.46 yuan, corresponding to the current expected PE of 31x / 24x / 22x, we think the company’s reasonable range for 2019 is 35x-40x, maintaining the “Buy” rating.