Changan Automobile (000625): Results bottoming out

Changan Automobile (000625): Results bottoming out
Event: The company announced the first quarter report of 2019: operating income of 160 in Q1 2019.100 million, down 20 a year.0%; net profit attributable to mother is -21.0 billion, down 250 a year.6%; deduct non-net profit -21.600 million, a year-on-year decrease of 341.0%. Q1 results bottomed out, expecting Changan Ford’s sales to stabilize and bring performance inflection points. The company’s 2019 Q1 results lead.0 million yuan, the first is: 1) the company’s own brand and Changan Ford sales average increase, the company’s overall sales of Q1 44.90,000 vehicles, down 31 every year.8%, of which Changan Ford sales 3.70,000 vehicles, down 71 every year.8%.2) As the industry competition intensifies, the number of related aircraft terminals of the 无锡夜网 company decreases, resulting in a decrease in bicycle profits.3) The main profit source of the Air Force Company is the investment income from Changan Ford, and the investment income of Q1 is -4.0ppm, compared with 11 in the same period last year.The 500 million US dollars growth budget is an initial increase in investment income from Changan Ford.We believe that the downturn in the Q1 industry and intensified competition. Overlapping Changan Ford products gradually lead to high channel inventory. The main task of Changan Ford’s Q1 is to actively destock, resulting in a large number of weak Q1 batch sales.The future will come to an end through destocking, and Changan Ford’s new product cycle will continue to exert momentum, and the company’s performance is expected to usher in an inflection point. The gross profit margin of this division decreased significantly, and the expense ratio significantly increased the company’s gross profit margin in Q1 20195.0%, compared with the same period last year 7.0 points, first of all, the downturn in the Q1 car market, intensified competition, and the price of the company’s related models has declined.The company’s 2019Q1 three rates total 12.0%, an increase of 1 over the same period last year.8 points.The selling expense ratio is 5.5% (one year-0.8pct); management expense ratio 6.8% (previously +2.1pct), and it is expected that the R & D expenses will increase. From the first quarter of 2019, the company will carry forward some R & D expenses from year-end to quarterly; the financial expense ratio is -0.3% (decade +0.4pct), mainly due to the decrease in interest rates. Strong product cycle opens, Changan Ford can expect strong product cycle in Changan Ford: 2018 Fox replacement model, Furuis remodeling has been launched; 2019 will have sharp mid-term model changes, Escape, Lincoln Corsair listed; 2020Q1 FordSUV explorers are localized, and the Lincoln pilots are on the market. In 2021, the new Sharp and Lincoln navigators will be on the market.We believe that the highlight of this round of Changan Ford’s strong cycle is to surround Lincoln with an attempt to significantly improve Changan Ford’s profitability and help Changan Automobile to recover to a scale of 10 billion profits. Earnings forecast and investment recommendations predict that the company’s EPS for 2019-2021 will be 0.44 yuan, 1.46 yuan, 2.28 yuan, corresponding to 19 for PE.2 times, 5.9 times, 3.8 times.Maintain the company’s “Buy” rating. Risk warning: The automotive industry is weaker than expected; the company’s related model sales 四川耍耍网 are lower than expected.