Juxing Technology (002444): Strategic layout significantly improves the interim report by 30% -50%

Juxing Technology (002444): Strategic layout significantly improves the interim report by 30% -50%

2019H1 results increase by 30%?
50%, steady growth of endogenous and epitaxial companies released 19H1 performance forecast: 19H1 is expected to achieve net profit attributable to mothers.

16?
4.

80 ppm / + 30%?
50%, in line with our expectations.

We believe that the reasons for the rapid growth of the performance include: 1) the realization of the optimization of the competitive landscape, the company’s market share in the field of hand tools and smart products continues to increase; 2) the company completed the acquisition of European Lista in June 18During the same period of the year, LISTA contributed part of the increase.

3) The continuous depreciation of the RMB since April 19, which is beneficial to the company’s operations.

We believe that the company is in the strategic adjustment period of branding and transformation. Some of the manufacturing capacity is expected to relocate to a certain extent to avoid the impact of tariff levies. Subsequently, it will gradually achieve steady growth and sustainable profit forecast.Is 0.

78/0.

85/0.

92 yuan, maintain “Buy” rating.

  During the orderly construction of overseas manufacturing bases, the overall impact of trade frictions is controllable. According to investigations, since more than 90% of the company’s export products are converted by FOB, that is, the actual tariffs and freight are borne by company customers, so the short-term impact on the company’s statements is limited.

The company started construction of a manufacturing base in Vietnam in 2018, and the base is expected to achieve production and supply in 2019Q4.

Taking into account the maintenance of long-term cooperative relationships, the company intends to achieve Vietnamese supply to some core customers.

Due to supporting facilities and transshipment, Vietnam ‘s comprehensive production cost is about 10% higher than the local level, but it is about 10% lower than the comprehensive local manufacturing cost under the 25% tariff. It also uses supporting facilities and the corresponding industry chain to further improve the cost.Expected to gradually decrease.

At the same time, the company is expected to start construction of a Thai factory this year to expand overseas production capacity.

In summary, the impact of trade frictions on the company is overall controllable.

  By the 2018 annual report, the company had basically completed the industrial integration of Arrow in the United States and completed the acquisition of Lista.

According to the company’s major asset purchase and related-party transaction report in June 2019, the company successively acquired Swiss Prexiso AG, which specializes in laser measurement tools, and Eudura Holding Limited, which specializes in hardware tools, in 2018;American Prime-Line for camp door and window hardware.

The company’s merger and 杭州桑拿网 acquisition of these five companies is expected to bring breakthrough synergies, which can strengthen the superstar’s production capacity in North America and Europe, the dealer system and logistics service network, and expand the company’s business categories.

We believe that the company’s feasible and powerful layout can quickly adjust the production and sales system to reduce the impact in the context of international fluctuations.

  It is estimated that there is room for repair and we maintain the “Buy” rating. We maintain our profit forecast. It is expected that Juxing Technology will return to its parent net profit for 2019-2021.

33/9.

12/9.

9.3 billion, an annual increase of 16.

2%, 9.

5%, 8.

9%, three-year compound strength 11.

48%, earnings per share are 0.

78, 0.

85, 0.

92 yuan, corresponding to PE is 13.

02/11.

89/10.

92 times.

The average PE value of similar companies in the industry will increase 14 times in 2019. Taking into account that the company’s competitiveness and profitability will help to benefit from branding and transformation strategies, the growth potential will reach the industry level. We maintain the company’s PE estimates for 16-18 times in 2019.The corresponding target price is 12.

48-14.
04 yuan, maintain “Buy” rating.

  Risk reminders: economic growth in major overseas markets; exchange rate risk; progress in Vietnam’s plant production is less than expected; trade frictions intensify; acquisition and integration progress is less than expected.