The profit structure is stable, and the gross profit contribution mainly comes from the construction truck business in medium and heavy trucks and light trucks.
The annual report basically meets our previous expectations.
The company's gross profit contribution in recent years mainly comes from light trucks and medium- and heavy-duty trucks. Gross margin contribution is roughly 40% for medium- and heavy-duty trucks, 50% for light trucks, and 10% for Others. The medium- and heavy-duty trucks have high technical content, and Futian Auman Heavy Trucks has a relatively high market share. It has a certain brand appeal and it is understandable that the company has high gross profit margin and gross profit contribution.
The company's 09 young card business 11.88% gross margin, higher than the 10.34% gross margin card business, the company's light truck business is mostly low-end products, gross profit margin is higher than the medium-heavy card, which is contrary to the general public awareness. Our unique insight is that this is mainly caused by statistical calibers. In the company era, light trucks belong to low-end light trucks, which have thin profits. Profits from domestic exports and domestic businesses have been flattened, and profits have been less. Olling's mid-end light truck business has sold about 40,000 units in 2009, and its contribution to gross margin should also be limited. The higher gross profit margin of the company's light truck business mainly includes the north-south engineering vehicle business as a statistical indicator for light trucks. We estimate that the gross profit contributed by the construction truck accounts for approximately 60%-80% of the gross profit contributed by the light truck business. Construction trucks are mainly used in rural areas and towns for sand and earth transportation. They are different from common truck design concepts. They are generally equipped with large rear axles and small engines. They do not require high speeds, but they have low climbing speed and low torque. High demand. From the standpoint of view, although it is a low-end dump truck, the price and profit are not low. The price of bicycles for light-duty construction vehicles is about 30,000 yuan higher than that for ordinary low-end light trucks. The price difference between medium-sized and heavy-duty trucks is greater than ordinary light trucks and may reach or exceed 5-7 million yuan. The source of profits for construction vehicles is mainly from the chassis modification business, such as the hydraulic turnover mechanism. In fact, the modification business of dump trucks for medium-heavy trucks is also considered to be a shortage in the industry.
Performance drivers still exist, and short-term performance remains resilient
1. Heavy truck business still has growth potential
In 2009, the company sold 84641 heavy-duty trucks, an increase of 41.8% year-on-year, much higher than the 17.71% increase in the heavy-duty truck industry. It mainly benefited from the recovery of logistics tractors, showing the company's advantages in the medium and heavy truck industry. We believe that the Foton heavy truck business is mainly based on dumping and flat paneling from 2004 to 2005. By the year 2009, the tractor market with the highest barriers to entry in the heavy truck industry will occupy half of the market, thanks to the company’s flexible procurement model. The solid foundation laid on the service network and good market research capabilities. The company can quickly and flexibly purchase the main assembly products corresponding to the market structure according to the changes in the market structure. For example, after the market transitioned to the Steyr platform in 2006, Weichai Power (69.50, 0.60, 0.87%) was in Futian. Auman’s matching ratio has rapidly increased from 20-30% to 80%-90% in 2009 in just a few years.
At present, the company’s order is strong and the terminal continues to be booming. It is expected that it will be able to realize production and sales of 1,1000/12,000 units in March. For the company's general concern about the company's production capacity, we believe that after the investigation, production capacity is not necessarily a bottleneck, mainly due to the following considerations. First, the company's actual production capacity is about 10,000-11,000 units/month, exceeding the market's general expectations. About 9,000 units/month, without considering the new production capacity, the actual annual production capacity is expected to reach 110,000 to 120,000 units; secondly, considering the seasonality of heavy truck sales, the company has started in the fourth quarter of 2009. The third quarter, the lack of capacity can also be compensated by improving market research capabilities. Heavy truck announcements are numerous, and only accurate understanding of the market's future trends will allow accurate production. The company advocated the Toyota production model. After experiencing great ups and downs in the sales of the industry and the company in 2004-09, it has learned lessons from the previous period and established a set of strict management systems to accurately predict the market and reduce the dependence on large stocks. , The dealer's inventory management idea is "guidance + control", will strictly control and guide the dealer's order model is reasonable, is different from other manufacturers of dealers is only order scheduling + full delivery type of the extensive type Controlled management.
The average selling price of heavy trucks in 2009 was 209,000, which was a significant improvement over the average selling price of 171,000 and 188,000 in 2007 and 2008. We think this is directly related to the upgrading of emission regulations and the rapid increase in the company's heavy truck power. The increase in power is related to the user's economic requirements after weight-based charging. It is sustainable. After calculation, we estimate that the average power of the heavy-duty truck industry will continue to increase by 6-10 horsepower in the next few years. Emission regulations and power upgrades in heavy-duty trucks will increase the added value of heavy trucks, which will increase the gross margin of the heavy-duty truck industry in the medium to long-term. As the industry's production capacity is generally tight and new production capacity will not be put in place before the end of the year, we believe that it is unlikely that heavy trucks will experience a large-scale price war in 2010.
2. The light truck business will still have a stable return
The company's 09 young card business achieved sales of 383,797 units, an increase of 16.5% over the same period of last year, which was lower than the average increase in the light truck market, but its market share was 24.6%, still ranking first in the country. The internal structure is roughly estimated to sell 40,000 units of Ao Ling light trucks, 221-22 million units of light trucks, and 150,000 sets of trucks (including light, medium, and heavy). We believe that the company will benefit from the automobile-to-country policy, the country’s fixed asset investment will maintain rapid growth (mainly benefit from the construction vehicles of the north and the south), and the living standards of the farmers will increase. The company’s light truck business will continue to grow rapidly.
The gross profit rate of the light truck business increased significantly during the reporting period, from 8.98% in 2008 to 11.88%, mainly due to the decrease in the prices of raw materials and the increase in value-added products during the reporting period. The average selling price of light-duty bicycles rose sharply from 46,621 yuan/station in 2008 to about 55,000 yuan, which was mainly due to the upgrading of emission regulations, the increase in sales volume of north-to-south construction vehicles, and the increase in the proportion of Olympic bell light trucks. The increase in the proportion of medium-end light trucks is due to the fact that the upgrade of emission regulations will lead to a lower selling price of low-end and mid-range light trucks. We believe that this will lead to a sustained substitution of low-end light trucks in the mid-term and will be able to withstand rising raw materials and guarantees. The favorable factors for the gross profit margin of the light truck business.
Future development plan worth the wait
The company stated in its annual report that it will adhere to the strategic thinking and business policy of “connotation of growth, structural adjustment, and globalizationâ€, expand the development of passenger vehicle business, large-scale equipment manufacturing industry, investment banking and financial services, and continue to strengthen commercial vehicles. Globalization, steadily advancing passenger vehicles, and taking the path of business expansion based on content growth. During the “Twelfth Five-Year Plan†period, commercial vehicles took the lead in realizing globalization and established an international leader in the field of commercial vehicles. With the opportunity for the development of new energy vehicles, the development of the sedan business was realized. By 2015, the planned production and sales will reach 1.5 million units and 1.8 million units will be obtained. The business revenue will be more than RMB 160 billion. Among them, overseas sales will exceed 500,000 units, accounting for 30% of the total sales volume. The company has specifically formulated the “5+3+1†strategy to achieve the industrialization of five key developing countries in the world. The Americas are Brazil and Mexico. Asia is India, Thailand or Indonesia. Europe is a CIS country with a focus on Russia; Achieve major breakthroughs in the markets of three developed countries and regions, including the European Union, North America and Japan. The EU conducted industrialization research, North America and Japan entered in other ways; “1†achieved a major breakthrough in the Chinese domestic market for car business.
We believe that in the development of Foton Corporation over the years, the management has been stable, and it has paid great attention to market research. The divisions can share good management systems and methods. The employees maintain a high level of work intensity and work efficiency. The company is relatively under-resourced. In practice, we have developed a development path suited to the national conditions and our own situation. The company's subsequent growth is worth looking forward to. However, due to the uncertainty, our valuation model does not consider the impact of new business on valuation for the time being.
Valuation and recommendations
The company is a leading company in the heavy truck industry, benefiting from the continued recovery of the domestic economy, the increase in value added from power and emission upgrades in the heavy truck industry; the light truck business will maintain a stable return, and the reduction of Cummins business will become a point of profit growth, and will not be considered for the time being. Under the influence of the heavy-asset asset revaluation gains and the establishment of a medium-heavy-card joint venture company, the earnings per share for the year of 10 and 11 were 1.76 and 1.90 yuan, and the current stock prices corresponding to the dynamic PE were 11.2 and 10.4, respectively. We increased the price from “cautious recommendation†to "Recommended" rating. The investment risk is mainly due to the channel conduction risk corresponding to the rise of raw materials, the decline in the boom index of the truck industry and the uncertainty caused by the cooperation of the joint venture company.
Broad Imp. & Exp. Co., Ltd. , http://www.hzweldingmachine.com