Weifu Hi-Tech (000581): Short-term pressure to benefit long-term national emissions upgrade

Event: The company released an annual report in the evening to achieve an operating income of 87.

200 million (-3.

3%), net profit of 24.

0 billion (-6.

8%), of which in the fourth quarter achieved revenue of 18.

600 million (-24.

2%), net profit 3.

4 billion (-52.

6%), retrospective of the impairment of Protean assets, which was basically unchanged from the previous quarter.

At the same time, the company plans to pay a cash dividend of 12 yuan for every 10 shares, corresponding to a dividend rate of 50.

4%, dividend yield 5.

1%, the company is expected to have an EPS of 2 in 19-21.

18/2.

12/2.

09 yuan, corresponding to November 19th.

1Xpe, maintaining “Highly Recommended-A” rating.

Comment: In the first and fourth quarters, there was a slight pressure. It is expected that the profit center will maintain a fuel injection system segment in the range of 2 to 2.4 billion.

2%), the sales volume of the card is 17.

80,000 vehicles (-27.

9%), light truck sales 1.89 million (+8.

6%), the overall performance of downstream customers is solid.

The company’s heavy truck fuel injection system market share is about 80%, medium and light trucks are about 50% to 60%, and the gradual emissions of fuel injection system is 2.44 million sets (-8.

3%), taking into account the inventory cycle of commercial vehicles, the industry trend is basically in line.

In this context, the multi-cylinder pump part of the headquarters achieved revenue of 50.

300 million (-10.

0%), gross profit margin temporarily reduced by 1.

29%, more earnings on the performance side.

Investment income Bosch Automobile Diesel achieved a profit of 35%.

500 million (+ 4%), reflecting the core part’s supplementary profitability.

Post-processing business segment, realized revenue 27.

900 million (+8.

9%), slightly higher than expected, but the full-caliber profit is under pressure, mainly due to the price increase of precious metal catalyst flakes since 18 years.

At present, the country’s fifth-stage exhaust gas treatment mainly uses DOC + SCR. The SCR is relatively microbially discharged, and the market is scattered. It is expected that switching to the country’s DPF stage as a post-processing leader will significantly benefit from the value of bicycles and double market growth.

In the passenger car business sector, the industry has experienced significant pressure in 18 years, and the company’s overall performance of the passenger car business has transformed the industry.

Turbo Business Revenue 27.

900 million (+8.

9%), Zhonglian Electronics achieved a profit of 18.

3 billion (+ 3%), all achieved positive industry growth.It is expected that the passenger car business will remain stable in the future.

2. Four-point correction, leading commercial vehicle to the road of return to value. Weak cycle + enhanced environmental protection + increased dividend rate + layout of new energy to open up market space, four-point correction to return to value.

The market competition for the company’s understanding of heavy truck parts and cyclical stocks, we believe that four factors drive the company on the road to return to value.

First, the commercial vehicle industry has gradually weakened. After 2010, the truck industry has reduced the change around 3.5 million hubs, and the future fluctuation center of the heavy truck industry will also be around 850,000 vehicles.

At the same time, the company’s historical performance is less volatile than the industry.

In 2014, heavy truck trucks with a low economic boom still had a 39% growth rate in performance, mainly due to the upgrading of national emission standards in that year.

Correction of cyclical stocks is worth re-examining.

Second, the environmental protection of automobiles will be unprecedentedly increased.

The National Five has arrived, but 70% of the vehicles in stock are still National Three and Pseudo National Three.

Beginning in 18 years, the government gradually established mobile monitoring stations in various places. At the same time, the country’s sixth phase has gradually progressed, and the company’s competitive advantage has been further strengthened.

Third, stable free cash flow, high dividend companies were rediscovered.

The market favors certainty, the company’s cash flow is excellent, and it has plenty of cash in hand. Higher undistributed profits increase the expected dividend rate.

At the same time, it also provides the basis for high-quality extensions. The next RBCD and UMC are on the way.

Fourth, in-depth deployment of new energy sources opens up room for growth.

The company has invested in Protean, a global leader in wheel drive systems. At the same time, it established an 80:20 joint venture with Protean, which is committed to the production and development of 18-inch wheel motor systems (B-class cars and light trucks).

We expect the product to be loaded and tested in 19 years, and 杭州桑拿网 subsequent companies will make subsequent investments depending on the progress of the project.

At the same time, the company lays out fuel cell core components, establishes SPV (a wholly-owned subsidiary) in Denmark, and acquires FCCT ApS.

The company holds a 66% stake in Danish IRD Fuel Cell A / S.

IRD is committed to the research and development and production of fuel cell components, with key products including membrane electrodes (MEA) and graphite composite bipolar plates (BPP).

The future is bright.

Risk Warning: Heavy truck sales are lower than expected; post-processing business expansion is lower than expected