Changan Automobile (000625) 2019 Interim Report Review: Marginal Improvement Begins

Changan Automobile (000625) 2019 Interim Report Review: Marginal Improvement Begins
Matters: The company released an interim report, with 1H19 revenue of 29.9 billion US dollars / -16%, net profit attributable to mothers-2.2 billion US dollars, located in the center of the gradual forecast of net profit attributable to mothers-1.9 billion to -26 trillion, in line with expectations.The company’s single-quarter revenue in 2Q19 was 13.9 billion yuan / -11%, which was attributed to its mother’s net profit of -1.4 trillion, a loss of 20 trillion before the first quarter of 19. Comment: Changan Autonomous 2Q19 mainly reflects cost reduction and government subsidies to reduce losses.Regardless of supplements and other non-economic issues, Changan’s independent 2Q19 operating performance was about -10.400 million, a 6-month loss reduction.700 million.Changan 2Q passenger car sales 南京桑拿网 were 15.10,000 vehicles, a year of -21% -32%, commercial vehicles 8.20,000 vehicles, a year of -16%-4% (total sales volume of -24%), the final revenue of 2Q19 single quarter 139 trillion, so -11%, -13% MoM, slightly higher than our expectations.The gross profit margin in 2Q19 was 12% in a single quarter, an increase of 5PP year-on-year, and an increase of 7PP month-on-month, which was in line with expectations. It was mainly due to the cost reduction of raw materials and parts procurement.Non-recurring profit or loss was 6 in 2Q19.10,000 yuan (1Q19 0.600 million), almost all of which are compensation, the second most important factor in reducing losses in 2Q19.On the expense side, Changan independently improved control in 2Q19 —— 1) Single-quarter sales expenses were -35% month-on-month, and the sales expense ratio was 4.1% month-on-month improvement, -4 in ten years.2PP, MoM-1.3PP mainly lies in the scope of business resources in 2Q19; 2) Management expenses in 2Q19 were basically flat in a single quarter, and the management expense ratio was 4.6% improvement, steady month-on-month, three years -3.3PP, +0 chain.7PP; 3) R & D expenses in 2Q19 single quarter + 86%, the trend is the same as last year; R & D expense rate 6.1% increases slightly by 0 per second.7PP, +3 MoM.3PP. Changan Ford 2Q19’s loss reduction is mainly due to aircraft structure changes and non-recurring projects.Changan Ford 1H19 is still in the destocking stage, with a total sales of 7.50,000 vehicles in the second quarter of 19, of which 3.70,000 vehicles, higher than -62%, which was roughly flat + 3% MoM.1H19 revenue reached 12.1 billion yuan / -61%, exceeding our expected average level, and the average bicycle price increased to about 16 million from about 14 million in the same period last year.1H19 net profit -7.800 million US dollars, a year down 2.5 billion US dollars, we estimate that 1-2Q19 were -1 billion, 2 billion, 2Q19 chain loss reduction is estimated to be achieved by non-recurring projects and aircraft structure changes. Changan Mazda continues to maintain better profitability.Changma 1H19 sold 6.10,000 vehicles / -32%, compared to 2 in the second quarter of 19.80,000 vehicles, -37% a year, -17% MoM, and finally realized first-half revenue of $ 7.6 billion / -31%, in line with expectations.1H19 net profit 8.7 ppm / -32%, it is expected to be 400 million + in 1-2Q19, with a net profit margin of 11.5%, continue to stay at a better level. Industry strong β configuration choices, double inflection points bring strong α.Industry outlook, we maintain the 2H19-2020 cycle recovery judgment, it is expected that the industry’s wholesale growth rate will continue to decline to narrow to a positive growth, the plate is expected to repair the formation of a catalyst.Changan PB underestimates the potential for strong beta potential.The scale of the company, apparently made in Lincoln (4Q19 Corsair, 2020) + explorer domestic (2020) + improved channel sales capacity + industry recovery, will help bring significant repair of the company’s sales and financial performance, deepening Ford’s accelerated adjustmentEarly strategic mistakes, repositioning, and re-operations reflect the relatively low alpha specificity, but the expected difference is a relatively potential one in the passenger car segment.The double inflection point of the industry cycle and the company’s operating cycle is expected to bring greater expected repair space. Investment suggestion: It is recommended to grasp the resonance between the new industry cycle and the company’s new cycle, and maintain the expected net profit attributable to the mother in 19-20 years7.9/48.1 ppm corresponds to PE 49/8.0 times, corresponding to PB 0.9/0.8 times, maintaining the “strong push” level. Risk reminder: Macro economy is less than expected, industry sales are less than expected, Changfu new car sales are less than expected