Keshida (002518): Improved gross profit margin boosted performance 3Q19 performance slightly exceeded our expectations

Keshida (002518): Improved gross profit margin boosted performance 失败:重查 3Q19 performance slightly exceeded our expectations
Performance review maintains outperforming 3Q19 performance in the industry, slightly exceeding our expected 1-3Q19 results announced by the company: Revenue 16.420,000 yuan, at least -8.8%; net profit attributable to mother 2.3 ‰, +3 a year.7%, deducting non-net profit 2.2.6 billion, an increase of 12.12%.3Q19 revenue was 6.43 trillion, with an increase of 0.4%, net profit 1.07 billion, an increase of 57%.The company’s gross profit margin was 36 in 3Q19.9% (excluding taxes and surcharges), surpassing the increase of 8.3ppt, driving profit slightly beyond our expectations.  Development Trends Photovoltaic installations are picking up, gross margins are picking up, exports continue to be strong, and quarterly profits are improving significantly.2H18 is affected by the photovoltaic 531 policy. Inverter manufacturers are competing at low prices under vicious installation, and the company’s inverter gross margin is only 20.5%.Since 2019, the photovoltaic industry has returned to orderly competition, and the gross profit margin of 1H19 inverters has rebounded to 35%.In addition, 1H19’s overseas business accounted for more than half of its revenue, a significant increase from last year, and its structure continued to improve.We believe that in 3Q19, with a rebound in domestic prosperity and strong overseas demand, gross profit margin increased steadily from the previous quarter, pushing the quarterly gross profit margin to 36.9%, an increase of 8.3ppt, driving profit growth.  We expect 4Q19 photovoltaic installations to be highly prosperous, and the inverter business is expected to continue to grow rapidly.  CICC Power New Energy Group predicts that China ‘s new installed capacity will be 35GW in 19 years. Under the total installed capacity of 15GW from January to August 2019, it is expected that 4Q19 will usher in the peak of photovoltaic grid-connected installations. We expect the gross margin to remain stable and invertersBusiness 4Q19 can maintain high growth.  We expect the UPS business to remain robust and the charging pile business to be replaced by industry and litigation.  We believe that the company’s UPS business in 3Q19 can maintain a growth rate of 10% + growth rate in 1H19. At the same time, the decline in data center accessories business such as supporting products has narrowed or increased, and the gross profit margin has remained stable compared to the previous quarter.steady.In addition, the lawsuit concerning the Yufu incident on the charging pile has not yet ended, and the termination was 1H19, there were 2.50,000 charging modules may be returned, which will have a certain impact on the revenue of the charging business, but considering that the company has accrued the full amount of bad debts in 2018 based on the balance of Yufu’s receivables assets, we believe that this yearThe subsequent impairment impact of the Yufu incident will be largely limited.  Earnings Forecast and Evaluation We fine-tune the revenue from 2019 to 2020 to 26.54/32.23 ppm (-3% /-6%), increase product gross margin and expense ratio for a certain period of time, maintaining 3/3 in 2019-2020.The profit forecast of 7.9 billion US dollars remains unchanged, currently reaching 2019 / 2020e 18 / 14x P / E. Considering the profitability repair of the inverter business, photovoltaic 4Q19 is expected to usher in high installed capacity and improve performance certainty. We raise our target price by 9.5% to 11.5 yuan, corresponding to 22 / 18x P / E for 2019/2020, there is 22.Upside of 6%, maintain Outperform rating.  The installation of risk photovoltaic 4Q19 was less than expected, and the charging pile litigation incident brought an additional large amount of accrual.