Zhejiang Dingli (603338): The impact of tariffs put pressure on the growth rate of Interim Report, optimistic about the volume of new arms to promote a new round of growth

Highlights of the report Event description Zhejiang Dingli released its 2019 Interim Report: Realizing Revenue8.

49 ppm, a ten-year increase of 8.

05%; net profit attributable to mother 2.

60 ppm, an increase of 26 in ten years.


Among them, in the second quarter of 2019, the net profit attributable to the mother was 4 respectively.

64, 1.

59 trillion, the same increase -2.

05%, 17.


Incident review The imposition of tariffs has increased North American revenue, and the company’s regional and product sales structure has been continuously optimized.

The company achieved domestic revenue in the first half of the year4.

The rate of domestic market revenue has increased from 42% since 2018 to 51% in the first half of the year. Overall, domestic revenue has continued to grow rapidly, and the growth rate is in line with expectations.

The tariff increase imposed by the United States will have a critical impact on the company ‘s most important North American market overseas. In the first half of the year, North American market revenue fell by about 54%, and North America ‘s share of overseas revenue fell by 33%.

The company actively adjusts its market strategy to cope 合肥夜网 with the impact of trade frictions in the North American market, and strengthens its development efforts in Europe, Asia and other markets.

In the first half of the year, revenues in Europe, Asia and other markets increased by 47% and 22%, respectively. The proportion of overseas revenue rose to 39% and 28%. The European and Asian markets have achieved rapid growth, and the US market has declined.The sales structure has been optimized. In terms of products, in the first half of the year, domestic arm-type product funding was sought, and the company’s arm-type products achieved domestic goals.

7.2 billion, an increase of 88%, and the proportion of domestic market revenue has gradually increased5.

02pct to about 18%.

In Q2, the gross profit margin was slightly higher than the previous month, and the intensive 合肥夜网 cultivation and refined management resulted in a record high net interest rate.

Q2’s gross margin decreased slightly by 2 compared with the previous quarter.

12pct to 40.

77%, mainly due to the increase in the proportion of arm-type products whose gross margin is still increasing and the impact of US tariffs.

The company’s Q2 net margin rose to 34.

A record high of 29%, an increase from the same period last month.

The company strengthened lean management, focused on reducing costs and increasing efficiency, and replaced the expense ratio by 9 during the first half of the year.

15%, of which the financial expense rate stems from a significant increase in interest income.

The high-end arm type project will be put into production next year, and it is optimistic that the volume of new arm type products will promote a new round of growth.

In our view, the growth rate in the first half of the year was rarely affected by short-term external influences, but the overseas regional sales structure continued to optimize.

The company has divided into first-line brand ranks. Leasers and end customers have a good reputation. The performance of scissors products is continuously upgraded. The promotion of the new arm type is widely recognized by the market. At present, the domestic arm type accounts for only about 10%, which is far lower than the European and American markets30% -40% of the domestic market in the next few years will still be a high-growth blue ocean market.

At the same time, in the short term, domestic demand is expected to continue to improve in the second half of the year.

It is expected that the company’s net profit attributable to its parent in 2019-2021 will be 6, respectively.

19, 8.

75, 12.

46 ppm, based on the latest equity, EPS is 1.

78, 2.

52, 3.

59 yuan / share, based on the latest closing price, the corresponding PE is 38 times, 27 times, 19 times, respectively, continue to recommend, maintain the “Buy” rating.

Risk reminders: 1) The progress of Sino-US trade negotiations is worse than expected; 2) Industry competition is intensified; 3) Exchange rate changes;