FAW Fuwei (600742) first quarterly report in 2019: slightly negative growth in the first quarter

Core point of view events: The company released the 2019 first quarter report: the company achieved operating income in the first quarter of 201829.

5.8 billion, a decrease of one year.

26%; net profit attributable to mother 1.

07 million, a decrease of 6 every year.

93%; net profit after deduction to mother 1.

0.6 million yuan, a decrease of 2 each year.

25%.

The company’s equity incentive plan completed the first grant of incentive objects: The company completed the first grant of stock options to the incentive objects on April 25, 2019. Except for one incentive object giving up on its own initiative, the company granted 2,280 for the first time to a total of 161 people.

One million stock budgets, exercise price of 13.

04 yuan / share, accounting for 4 of the company’s total share capital.

49%.

Our comments on this are as follows: In the first quarter of 2019, the company’s performance slightly overlapped in the short term, and the net profit attributable to the mother company stabilized from the 上海夜网论坛 previous month, and the industry average.

Domestic car sales in the first quarter of 2019 were 637.

240,000 vehicles, a decrease of 11 per year.

32%, the company’s performance was dragged down by the industry, and operating income was slightly replaced every year.

26%, net profit attributable to mothers is slightly broken down every year6.

93%; compared with the previous month, as the domestic auto industry ‘s sales growth in the second half of 2018 changed from positive to negative, the company ‘s net profit attributable to mothers decreased quarter by quarter: 2018 Q2 – 2018 Q4 net profit attributable to mothers were 1.

4.3 billion, 1.

3 billion, 1.

07 million yuan, the net profit attributable to the mother in Q1 2019 is 1.

07 trillion, began to stabilize.

70% of the company’s revenue comes from FAW-Volkswagen, which will benefit significantly from FAW-Volkswagen’s new car cycle.

In 2018, 70% of the company’s one-year operating income was derived from FAW-Volkswagen. FAW-Volkswagen started a super new car cycle in 2018. In 2018-2020, it launched 16 new and replacement models (including 8 new SUVs) and launched a newThe “Jetta” sub-brand (including 3 new vehicles) has entered the low-end market, and the company will fully enjoy the FAW-Volkswagen new car cycle industry chain dividend.

We forecast FAW-Volkswagen’s annual sales in 2019 to reach 225.

80,000 vehicles, an increase of 10 in ten years.

8%, annual sales in 2020 will reach 270.

90,000 vehicles, an annual increase of 20.

0%.

Equity incentive plan completed the first reward, fully motivated employees, and further promoted mixed reform.

The company completed the first grant of a mixed-equity equity incentive plan and awarded 2,480 to incentive objects.

One million stock budgets, about 4% of the company’s total share capital.

49%, incentives include one company director, three senior management personnel and 157 core management personnel, a total of 161 people, the grant price is 13.

04 yuan.

As a traditional state-owned enterprise, the company now provides large-scale and wide-ranging fair incentives which will definitely improve the work enthusiasm of the company’s employees, and the company’s mixed reform will be further promoted.

Investment suggestion: The company has significantly benefited from FAW-Volkswagen’s new car cycle. The large-scale and large-scale equity incentive plan was announced for the first time, followed by mixed ownership reform. The profit margin is likely to increase. Conservatively estimate FAW Fuwei’s total revenue in 2019-2021.Followed by 158.

45, 197.

72, 215.

91 trillion, with a growth rate of 16.45%, 24.

78%, 9.

20%, net profit attributable to mother in turn is 5.

91, 7.

61, 8.

62 trillion, with a growth rate of 19 in turn.

4%, 28.

9%, 13.

3%, the current market value is 66.

20 ppm, corresponding to PE in order of 11.

2, 8.

7, 7.

7 times, maintaining the “recommended” level.

Risk reminders: ① the risk of rising raw material prices; ② FAW-Volkswagen’s production capacity is less than expected; ③ the domestic automobile market is sluggish.