Xinjie Electric (603416) Third Quarterly Report Comment: Driving the rapid growth of industrial control is expected to transform


Xinjie Electric (603416) Third Quarterly Report Comment: Driving the rapid growth of industrial control is expected to transform

Event: Xinjie Electric released three quarterly reports: the first three quarters of 2019 achieved revenue4.

6.4 billion, net profit attributable to mothers1.

1.6 billion; in the third quarter, it achieved revenue of 1.

5.9 billion, net profit attributable to mother 0.

4.4 billion.

Investment points: Revenue growth rate remains low, and gross profit margin has rebounded: the company’s revenue growth rate in the first three quarters was 6.

58%, compared with 8 in the first half.

34% contracted slightly; single quarter revenue in the third quarter increased by 3 each year.

34%, basically unchanged from the second quarter.

The industry boom is still at a low level, and it is not easy for the company to maintain a small growth; the restructuring, the company still maintains the trend of increasing gross profit margin, and the gross profit margin for the three single quarters this year has been 37% / 39.

9% 41.


The company’s third quarterly report revealed that the low gross profit margin driven business maintained rapid growth, which shows that the company has achieved great results in reducing costs and further improved the market competitiveness of its driven products.

The operating quality of the industry’s trough period has improved, and R & D expansion has increased: The company continued to maintain excellent operating quality while its revenue increased slightly.

The company’s accounts receivable and bills at the end of the third quarter were 1.

1.7 billion, a year-on-year decrease of 6.

4%; net operating cash inflows in the first three quarters were zero.

$ 8.3 billion in net inflows in the previous year.

1.2 billion pixels increased.

In addition, the company’成都桑拿网s R & D investment continued to increase, with R & D investment in the first three quarters.

870,000 yuan, an increase of 20 in ten years.

15%, accounting for 7% of the total revenue from the end of last year.

6% increased to 8.


Continued R & D investment continues to increase the scale of its domestic PLC leader; it continues to accelerate the evolution of drive system technology to continue to increase market share.

The fourth quarter of the industrial control industry may recover: the average of the official and Caixin PMI index bottomed in June this year, of which the official PMI index reached 49 in September.

8%, which is close to the 50% prosperity threshold. The Caixin PMI index has entered the expansion range in August and September.

In addition, although the growth rate of manufacturing fixed asset investment in September still showed a volatile trend, the downward trend slowed down from 2 in August.

6% was slightly up to 2 in September.


Among them, the average value of general equipment, special equipment, automobile manufacturing, and computer communication electronic equipment manufacturing, which accounted for a large proportion of the total fixed asset investment in the manufacturing industry, reversed upward in September.

The automation rate of the above major industries is higher than the average level of the entire manufacturing industry and is the core downstream of industrial control equipment. Therefore, it can be judged that the industrial control industry may have an inflection point in the fourth quarter.

Give “Buy” rating.

It is estimated that the company’s operating income for 2019-2021 will be 6.

5.1 billion, 8.

1.6 billion, 10.

3.9 billion, net profit attributable to mothers is 1.

5.3 billion, 2.01 ppm, 2.

59 trillion, corresponding to the current sustainable, dynamic price-earnings ratio of 25, 19, 15 times.

Covered for the first time and given a “Buy” rating.

Risk reminder: The manufacturing industry is weaker than expected; competition intensifies in the downward process of the industry; if cost control cannot be done, there is risk in gross profit margin; new product and new technology development progress exceeds expected risks.