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Great Wall Motor (601633): The 2018 Annual Report commented that the operating inflection point is now awaiting industry recovery to improve profitability

Great Wall Motor (601633): The 2018 Annual Report commented that the operating inflection point is now awaiting industry recovery to improve profitability

Great Wall Motor (601633): The 2018 Annual Report commented that the operating inflection point is now awaiting industry recovery to improve profitability
Event: The company released its 2018 annual report and gradually realized revenue of 992.3 ‰, at least -1.92%, net profit attributable to mother 52.100 million, +3 for ten years.58%, net profit deduction to non-mother 38.900 million a year-9.53%.Proposed dividend of 0.29 yuan (including tax), the dividend rate is about 3.7%.  Sales outperformed the passenger car industry, and bicycle revenue and bicycle profitability were under pressure.Great Wall sold 1.05 million vehicles in 18 years, -1 in ten years.6%, better than industry-4.3% growth rate.The company’s profit quality was under pressure due to the industry’s downward improvement. By allowing profit to maintain the city’s share, the rebound in 18Q4 sales was mainly due to promotions.The company’s gross profit margin and net profit margin increased in 18Q3, and the industry’s pressure was the main cause. In addition, the decrease in WEY share of high-end models also dragged down.Bicycle revenue Q3 dropped to 8.80,000 yuan, down 1 from the previous month.At 50,000 yuan, the non-returned profit of bicycle deduction for 18Q3 / Q4 is below 1,000 yuan, which is the bottom in recent years. If the capitalization ratio of R & D is raised to 56% for the first time, the profit quality is lower than the apparent level.  The inflection point of operation in 2018 has now arrived, and new models are expected to boost sales and profits.The adjustment of Great Wall’s operating budget in 18 years was obvious. 1夜来香体验网) Spin-off of the subdivided product division to operate independently, large single products and platformization are expected to further reduce the cost-effectiveness.2) Intensify marketing and R & D reforms, launch F-series models and H-series spin-off marketing, set up four companies to operate independently with core components, and strengthen market-oriented competition.3) Overweight new energy to make up for shortcomings, and Euler’s new model is expected to become a new growth driver.4) Capital expenditure Q4 increased to 3.2 billion, and the dividend rate increased to 50%, demonstrating the company’s confidence in future development.  Retail is expected to transform in 19Q2, and the quality of the company’s earnings will improve.China’s passenger car sales and ownership still have more than double the space, and it is expected to maintain a 3% growth hub in the long run. In 2018, it is mainly affected by the 15-year purchase tax decline and high base, rather than weak demand.We expect passenger car retail to initially achieve +6.4%, the growth rate is expected to show low before high, retail sales are expected to turn positive in Q2.The company’s progress has taken the lead to benefit from low inventory, and increased profitability has improved to form a better double-click opportunity.  Investment rating: It is expected that the company’s net profit attributable to its parent in 2019-2021 will be 57.3/63.6/71.200 million, EPS is 0.63/0.70/0.78 yuan, PE is 12 respectively.4/11.2/10.0x, maintain “Buy” rating.  Risk warning: Macroeconomics is less than expected; passenger car sales are less than expected; price war risks