Chint Electric (601877): Three major strategies and channel construction have a positive catalytic effect on the low-voltage business

Chint Electric (601877): Three major strategies and channel construction have a positive catalytic effect on the low-voltage business

A brief evaluation of the results: Chint Electric released the 2018 annual report and the 2019 first quarter report. In 2018, it achieved revenue, net profit attributable to mothers, and net profit attributable to non-mothers were 274.

2, 35.

9, 36.

5 billion, an increase of 17 each year.

1%, 26.

47%, 38.

81%.

In Q1 2019, revenue was realized, net profit attributable to mothers, and net profit attributable to non-mothers was 59.

9, 5.

42,5.

2.7 billion, an increase of 17 each year.

66%, -11.

6%, -12.

11%.

  Business analysis: Profitability rebounded significantly in 2018; instead of selling investment income from the sale of power plants, the 2018 annual report and the first quarter of 2019 reported bright growth.

In Q1 2018, the company’s sales of power plants confirmed investment income of approximately 1.

700 million, long-term sale of generators confirmed investment income of about 4.

1.5 billion, offset this effect, net profit attributable to mothers in 2018, net profit after deducting non-mothers increased by 11 respectively.

9%, 23%. In Q1 2019, net profit attributable to mothers, net profit attributable to non-mothers increased by 22, respectively.

22%, 22.

57%.

Benefit from the company’s overall net margin increased by 0.

97pct, the company’s ROE rose to 16 in 2018.

59%, a significant increase 重庆耍耍网 every year 2.

38 points.

  Chemical reactions occurred in the three low-voltage strategies, and gross margins and market share of low-voltage appliances rebounded significantly.

The company’s low-voltage business development strategy can be summarized into three major strategies: “mid-to-high-end upgrade”, “replacement”, and “project solution marketing”. At the same time, the company has further strengthened channel construction. By the end of 2018, more than 500 core dealers and more than 3,600Distribution outlets.

In addition, the company has made rapid progress in the six direct sales industries such as power, machinery and new energy. It already has benchmark customers in many industries such as State Grid, China Mobile and China Resources.

At the same time, due to the slight decline in bulk prices, Q2 price increases, automated intelligent manufacturing and other factors, the company’s low-voltage electrical appliances rebounded significantly.

51 points to 33.

99%.

We estimate that the market capacity of the low-voltage electrical industry in 2018 will be around 800 trillion, and the company’s market share of low-voltage electrical equipment is about 14.
.

6%, continued to increase by 1 last year.

25pct, has maintained a rapid rise for three consecutive years.

  Photovoltaic pressure to withstand policy pressure to maintain steady growth, household photovoltaics will become the biggest attraction in 2019.

  After the “531” policy, the household photovoltaic supplementary policy has not been implemented yet, but the company still achieved 100,000 new installations by focusing on the advantageous areas, strictly controlling costs, and pushing back the cost without using household subsidies.Low-voltage, photovoltaic business synergy and cost advantages in channels and products.

In 2019, the company’s new residential photovoltaic capacity is expected to reach 500MW, which is expected to further increase by 40% on the basis of 100,000 new installations in 2018.
Benefiting from the good development of household photovoltaics and industrial and commercial photovoltaics, the company’s distributed installed capacity increased by 500 MW, and the photovoltaic asset management structure continued to advance steadily. The capacity of centralized generators in power-restricted areas was reduced. Optimized operations increased power generation hours and ROE.Get improvement.
  Profit forecast and investment suggestions: The company’s continuous improvement of low-voltage electrical appliances, and household photovoltaic policies are gradually improving.

It is estimated that net profit attributable to mothers will be 42 in 2018-2020.

7, 51.

3, 60.

700 million.

Taking into account the good development trends of the industry side and the company side, a target price of 35 is given.

7 yuan, corresponding to the 18x estimate for 2019.

  Risk reminders: PV industry boom shift; policy adjustments such as real estate purchase restriction; upstream bulk raw material price fluctuations