Xugong Machinery (000425): Doubled profit in the interim report, substantial consolidation of asset quality

Xugong Machinery (000425): Doubled profit in the interim report, substantial consolidation of asset quality

The company achieved revenue of 311 in the first half of 2019.

560,000 yuan, an increase of 30 in ten years.

成都桑拿网12%; net profit attributable to mother 22.

8.3 billion, an increase of 106 in ten years.

82%; net operating cash flow 28.

410,000 yuan, an increase of 45 years.


Net profit fell within the Air Force’s forecast range, in line with expectations.

A brief comment on production and sales and revenue creating a record high, and net profit doubled ① In the first half of 2019, the company focused on the market and focused on clearing risks, asset quality, and profitability have improved significantly, making operating indicators continue to improve.

From the perspective of income, 19H1 income / attributable net profit were 311.


830,000 yuan, an increase of 30 in ten years.

12%, 106.


In terms of business, 2019H1 lifting machinery revenue 114.

780,000 yuan, an increase of 33 in ten years.

94%, the market share steadily ranked first, of which the mobile crane market occupies the first place in the world, the 100-ton large-tonnage mobile crane market is spread across half of the country, and the 1,000-ton large-scale cranes occupy an absolute leading position in the industry.Historically reached more than 60%; revenue from scraping machinery29.

950,000 yuan, an increase of 11 in ten years.

83%; revenue from compaction machinery 10.

75 ppm, a ten-year increase2.

34%; Revenue from road machinery 6.

USD 4.2 billion, an annual increase of 37.

09%, of which the market share of paver is the first in the country; the income of piling machinery is 34.

40,000 yuan, an increase of 44 in ten years.

74%; income from fire protection machinery 10.

21 ppm, an increase of 59 in ten years.

09%, of which the gap between the market share of high-altitude operation vehicles and the first place in China has narrowed, and high-class fire trucks have ranked first in the country; the environmental sanitation machinery has an income of 9.

46 ppm, an increase of 14 per year.

07%, of which the market share of environmentally-friendly removable garbage trucks ranks first in the domestic industry, and the market share of road sweepers and scrubbers ranks among the top three in the domestic industry; ② From the perspective of profit, the company ‘s profitability has increased significantlyThe gross profit margin of the product is 18.

68%, an increase of one year.

08 points.

By business, the company’s core business gross profit margin of lifting machinery was 24.

86%, an increase of 3 per year.

12 pct; gross margin of fire machinery is 25.

71%, an increase of 7 per year.

90 pct, increasing crack; sanitation machinery gross margin is 13.

44%, an increase of 2 per year.

65 pct; gross margins of scraping machinery, compaction machinery, road machinery, and piling machinery all declined to varying degrees, but considering that these four business revenues accounted for only 27 of the main business revenue.At the same time, the gross profit margin of the four businesses only slightly decreased, so the overall impact on profitability was small; ③ From the perspective of operating quality, the company accrued credit impairment losses in the first half of the year7.

3.4 billion, asset impairment losses1.

53 trillion, a total of 8.

8.7 billion.

The historical burden of account receivables, inventory and other processing was accelerated, and the company’s asset quality gradually consolidated.

The implementation of mixed reforms of controlling shareholders has been stepped up, and management innovation capabilities have been enhanced. ① The company’s mixed reforms of state-owned enterprises are currently being implemented as planned.

At present, the Xuzhou State-owned Assets Supervision and Administration Commission of Xuzhou City, through Xugong Group, indirectly holds 100% of the company’s controlling shareholder, Xugong Co., Ltd. It is expected that through the mixed reform, Xgong Co., Ltd. will retain social capital and employee shares, and the proportion of conventional equity will decrease significantly, but it will still maintain an absolute controlling share;② We believe that by dating high-quality investors, the company’s management structure, operating mechanism and incentive system will be optimized to better stimulate the vitality of state-owned enterprises and further increase the company’s competitiveness.

Exploiting the “Belt and Road” fast track, the company has completed a sound overseas business layout ① 2019 H1 XCMG brand export scale, both self-operated exports ranked first in the industry.

At the same time, the company has the largest export share in 35 of the 65 countries along the “Belt and Road”.

Specifically, the company achieved international sales revenue of 44 in 19H1.

48 ppm, an increase of 20 in ten years.

07%, revenue accounted for about 14.

81%, gross profit margin increased by three in ten years.

18pct; ② With reference to the development history of overseas construction machinery leaders, we believe that as the domestic market demand stabilizes, leading companies will definitely experience the expansion of overseas markets.

We believe that even if XCMG’s overseas revenue continues to grow rapidly, the current overseas revenue accounts for only 14% of total revenue, and it still has room for expansion.

Profit forecast and investment rating: From the perspective of the industry, since 2017, the construction machinery industry has maintained rapid growth due to various factors such as infrastructure investment, stricter environmental policies, equipment upgrades, manual replacement, and export growth.

It is estimated that starting from the second half of 2019, the overall volatility of the construction machinery industry will decline, and it will enter a narrow growth phase.

Taking into account the order of entry of various varieties, determine the next phase of the expected growth in sales of cranes, concrete machinery and other sub-segments; from the perspective of the company, it does not consider the holding of the East Mixed Reform, only based on the growth rate of existing business sales and continued statementsFixes expected for company 2019?
Income in 2021 will be 529.



400 million, net profit attributable to mothers was 40.



One million yuan.

Corresponding to the closing price on August 30, 2019, PE is 8.

26x, 6.

88x, 6x.

Maintain target price of 7.

79 yuan, maintain “Buy” rating.

Risk factors: the risk of gradual fluctuations in the construction machinery industry