Yutong Technology (002831): Revenue growth improves as scheduled and profits continue to increase

Yutong Technology (002831): Revenue growth improves as scheduled and profits continue to increase
Event: The company announced the third quarter report of 2019, and achieved operating income of 63 in the first three quarters.4.6 billion, an increase of 16 every year.35%, net profit attributable to mother 6.08 billion, an increase of 12 every year.13%; net profit after deducting non-profit increased by 14 in ten years.14%.Comments: 1. The performance was in line with expectations. The recovery of large customers drove Q3 revenue growth to improve QoQ. The single quarter revenue growth rate continued the upward trend since the first quarter and continued to grow 22.79%, a significant increase of 9% from the previous month.2pct, we estimate that it was mainly driven by the advance 重庆耍耍网 replacement of some of the company’s major international customers in the third quarter.At the same time, the company intensified the development of smart hardware, tobacco and alcohol, big health, cosmetics and luxury markets in 19 years. Among them, Xiaomi, Lenovo, Harman, Shuijingfang, Goer, OPPO, Guizhou Xijiu and some international customersThe sales growth rate of the company was even better; the rapid revenue growth of Yunchuang’s business drove the company’s overall scale to grow steadily.In the first three quarters, the net operating cash flow increased by 36 each year.98%.2. The gross profit margin continued to improve, and the increase in costs affected the increase in profit margins. Since 4Q18, the prices of raw materials such as paper have fallen.42%, an increase of 3 per year.21pct, Q3 single quarter gross margin of 33.75%, increase by 2 every year.55 points.This year, the company strengthened the introduction of international advanced talents and industrial technical personnel, which increased the salary of management personnel, and increased R & D investment in new materials and equipment transfer. In the first three quarters of sales, management, R & D, and financial expense ratios increased by 0.57pct, 1.78pct, 0.4pct, which makes the net interest margin drop slightly by 0.53pct to 9.88%.In Q3 single season, return to mother, net non-profit increased 13%, 12 respectively.63%.3. In the future, the start-up of smart factories is expected to drive profit recovery, and maintain the view of “Strongly Recommended-A” rating: 1) The company’s product quality and supply capacity in the consumer electronics packaging field are leading the global production capacity layout.As a result of the recovery, 3C new customers have become a new driver of scale; 2) The rapid deployment of tobacco, alcohol, health, cosmetics and other fields, Yunchuang’s business model has begun to make progress, creating a new growth pole; 3) In the future, smart factories will be gradually put into operation and profitAbility to further improve the space; 4) Leading enterprises gain the advantages of resource integration and open up the space for growth; 5) Employee shareholding achieves stakeholder binding, and increased holdings of repurchases show development confidence.Expected 2019?Net profit in 2021 will be 10 respectively.8.4 billion, 13.01 billion, 16.USD 07 trillion, with annual growth rates of 15%, 20%, and 23% respectively. Currently, it is expected to correspond to 19 years and 20 years PE of 18x and 15x, respectively. Maintain “Highly Recommended-A” rating.Risk 重庆耍耍网 warning: the risk of price fluctuations of raw materials such as paper; the risk of customer concentration.