Racing Wheel Tire (601058) 2019 Interim Report Review: Multi-Factor Resonant Interim Report + 59% Estimated Profit Continuously

Racing Wheel Tire (601058) 2019 Interim Report Review: Multi-Factor Resonant Interim Report + 59% Expected Profit Continuously Improves
Events: 1. The company released its 2019 Interim Report and achieved operating income of 70 in the first half of the year.9.2 billion, +8.03%; net profit attributable to mother 5.07 trillion, +59 ten years ago.34%; net profit after deduction to mother 4.810,000 yuan, +65 for ten years.31%.Q2 achieved operating income of 37 in a single quarter.24 ppm, +5 for ten years.34%, +10.57%; net profit attributable to mother 3.23 ppm, +63 a year.18%, +75 from the previous quarter.27%.2. The company issued a share repurchase plan. Main points: 1.Multi-factor resonance, beautiful performance H1 2019, the company’s beautiful performance, mainly due to: (1) stable operation, production and sales increased steadily.In the first half of the year, tire production was 1869.580,000, previously +2.34%; sales were 1888.320,000, previously +3.89%.(2) The gross profit margin of sales increased from 18 in ten years.47% rose to 22.18%, mainly due to the increase in the unit price of the product, the analysis is mainly overseas capacity, and the main raw materials such as synthetic rubber, carbon black, steel cord and other price substitution.Q2 single-quarter sales gross margin reached 26.51%.In the first half of the year, the company’武汉夜生活网s tire revenue was twice.22%, corresponding to an average price of 336.84 yuan / article, ten years +13.79%.(3) Sino-U.S. Trade frictions, tariffs imposed on domestic capacity exports, and overseas capacity benefits.In the first half of the year, the company’s Vietnam factory revenue reached 17.610,000 yuan, 38% a year, net profit 3.2.5 billion, previously + 50%, profit accounted for over 60%.(4) Domestic tire lubricating oil replaces 13% with 16%; export tax rebate is increased from 9% to 13%.(5) The company’s three fee control is stable. 2.Expand overseas production capacity and increase off-highway tire throughput The company currently has 40 million semi-steel tires, 5.6 million all-steel tires, and 6.4The first off-road tires, of which there are already 10 million semi-steel tires, 1.2 million all-steel tires, and 3 in the factory in Vietnam.5 The annual production capacity of entry-level off-road tires and other products.In Q2 of 2019, the company’s 2.4 million sets / year all-steel tire project in Vietnam, which is a joint venture between the company and Cooper, started construction and is expected to start production in 2020.At the same time, the internal Dongying base in 2019 increased the capacity of 7 million semi-steel tires, an increase of 1 in Vietnam.5 Prototype off-highway tire capacity. 3.The release of the share repurchase program highlights the development confidence of the number and price of repurchases: The company intends to use its own funds to repurchase some of the company’s A shares in a concentrated bidding transaction at a repurchase price of no more than 5.Under the condition of 3 yuan / share, the number of shares to be repurchased is not less than 100 million shares, not more than 1.3.5 billion shares, the maximum number of repurchased shares accounts for 5% of the company’s current total share capital. Repurchase period: no more than 6 months from the date when the performance of the board of directors passed this repurchase program. Use of share repurchase: It is intended to be used to implement the company’s equity incentive plan. 4.Earnings forecast and rating It is estimated that the company’s net profit attributable to the parent in 2019-2021 will be 10 respectively.8.4 billion, 12.3 billion, 13.760,000 yuan, corresponding to EPS 0.4 yuan, 0.46 yuan, 0.51 yuan, PE 9.6X, 8.5X, 7.6 times.Although domestic tires have always been regarded as lacking global competitiveness and weak upstream and downstream bargaining power, considering the continued growth of car ownership and the recovery of the tire industry, especially the company’s overseas capacity advantage is prominent, it is covered for the first time, giving a “buy” rating. Risk warning: auto sales continue to fluctuate, prices of raw materials and products fluctuate gradually, the progress of projects under construction in production is less than expected, and changes in tariffs and tax rates.

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