Great Wall Motor (601633) Company Dynamic Comment: Improved Gross Margin and Improved Profit Elasticity Highlighted

Great Wall Motor (601633) Company Dynamic Comment: Improved Gross Margin and Improved Profit Elasticity Highlighted
Event: The company released the third quarter of 2019 report, and achieved total operating income of 625 in the first three quarters of 2019.80,000 yuan, a decrease of 6 over the same period last year.1%; net profit attributable to parent company 29.20,000 yuan, a decrease of 25 over the same period last year.7%; net profit attributable to non-recurring gains and losses attributable to shareholders of listed companies25.9 trillion, a decrease of 28 over the same period last year.7%.In the third quarter of 19, the company realized a total operating income of 212.0 million yuan, an increase of 18 over the same period last year.0%, achieving a net profit of 14 attributable to the parent company.0 million yuan, an increase of 506 over the same period last year.8%, an increase of 88 from the second quarter of last year.2%, 3Q19 net profit attributable to mothers achieved year-on-year and quarter-on-quarter growth was mainly due to the company’s sales growth (+12.4%) and further strengthened cost control capabilities. Core views: 1. The gross profit margin improved beyond the previous month, and the cost control ability was further strengthened.Gross profit margin for the third quarter of 19 was 18.5%, an increase of 4 per year.8 units, an increase of 4 from the previous quarter.With 9 averages, the rise in 3Q gross profit margin also led to a rise in gross profit margin to 15 in the first three quarters of 19 years.3%, compared with the same period last year, the decline was narrowed to 3 percentage points. The significant improvement in the 3Q gross profit margin from the previous quarter was mainly due to the slight improvement brought by the sixth-generation models.Net profit margin for the third quarter of 19 was 6.6%, an increase of 5 per year.3 digits, up 2 from the previous quarter.6 averages, 3Q19 four fee ratio is 8.3%, down by 1 every year.With 9 units, the cost control ability is further strengthened, which is one of the company’s core competitiveness. 2. Bicycle revenue and profit have increased significantly, and the sales structure has continued to improve.In the third quarter of 19, the company’s bicycle revenue was 9.20,000 yuan, an increase of 20 per year.6%, a month-on-month increase of 2.7%, bicycle net profit is 0.610,000 yuan, an annual increase of 508.7%, an increase of 67% from the previous month.5%.The company’s significant increase in bicycle revenue and net profit each year is mainly due to 1) sales growth, the company achieved sales 23 in the third quarter of 19.10,000 vehicles, an increase of 12 per year.4%, an increase of 10 from the previous month.0%, 2) The reduction of the National Six Model, the minimum average 3Q of the company’s National Model 3 increased by about 2,000 yuan, and 3) the improvement of the sales structure improved the WEY brand and pickup truck sales to 10 respectively.0% and 14.5%, a month-on-month increase of 0.3 and 1.0 averages.4Q WEY VV6 remodeling, Haval H9 remodeling, new models WEY VV7GT fuel version and PHEV version, high-end pickup trucks will contribute sales growth, and the sales structure is expected to further improve. 3. The new platform supports cart-type upgrades, and the globalization strategy is in full swing.The company has built three new platforms, large, medium and small, to achieve a higher level of sharing of spare parts, improve product quality and effectively reduce costs. In 2020, two new SUVs will be 无锡夜网 launched on the platform.The vertical replacement promotes the comprehensive upgrade of the company’s models.In addition, the company comprehensively launched a strategy to achieve overseas exports in the first three quarters of 19 years.10,000 vehicles, an increase of 41% each year. In addition to covering the Russian mainland, the Tula factory in Russia radiates throughout Eastern Europe, which will further increase the company’s overseas sales and increase the company’s brand influence. Profit forecast and investment suggestions: It is estimated that the company’s net profit attributable to the parent in 19-21 will be 46/53/56 trillion, and the EPS will be 0.50/0.58/0.62 yuan, corresponding to 19 years PE 16X, maintaining the “recommended” level. Risk warning: The automobile market is sluggish, new car sales are less than expected, and discounts have an excessive impact on earnings.