Yutong Bus (600066) 2018 Annual Report Comments: Long-term results meet expectations Q4 results are better than expected

Core Views The company achieved revenue of 317 in 2018.

5 ‰, at least -4.

44%, net profit attributable to mother is 2.3 billion yuan, -26 years.

5%, in line with market expectations.

In the short term, the company ‘s passenger car sales and profits are affected by the subsidy decline and the industry ‘s low business climate. Now it is a relatively obvious replacement.Market expansion, maintaining the “buy” level.

2018 results were in line with expectations and operating cash flow improved.

The company’s revenue in 2018 was 317.

46 ‰, at least -4.

44%; net profit attributable to mother 23.

10,000 yuan, at least -26.

45%, net profit attributable to mother 7.
.

25%, twice -2.

2pcts; Net profit after deduction for 2018 17.

83 megabits, at least -36.

40%, performance is basically in line with expectations.

The company’s performance is mainly due to: 1) the overall demand of the passenger car industry declined in 2018; 2) the impact of new energy vehicles replacing the decline.

By quarter, 2018Q4 revenue was 123.

720,000 yuan, at least -13%, +68.

2%, gross profit margin was 28%, rebounded significantly, attributed to net profit 11

Ten percent is 04, -10 percent a year, +89.

9%, net profit attributable to mothers in the fourth quarter was 8.

9%, +1.

02pcts, Q4 performance was significantly better than market expectations.

The company’s operating cash flow in 2018 was 25.

8 ‰, scored -13 in 2017.

1 trillion, obviously improved.

In addition, in 2018, it is planned to pay 5 yuan for 10 yuan, with a cash dividend of 11 trillion, accounting for 48% of net profit.

Passenger car sales were lower than expected and the proportion of compensation was decreasing.

Affected by the industry’s poor business climate, the company’s bus sales in 2018 were generally lower than market expectations. The cumulative sales in 2018 were 60,868 units, and the 2017 sales were 67,268 units, each time -9.

5%.

Among them, a total of 25,670 large buses were sold, -6 per year.

3%, the cumulative sales of medium-sized buses are 26,532, -17 per year.

1%, cumulative sales of light vehicles 8,666, +10 per year.

1%.

Among them, the company’s new energy bus sales in 20182.

470,000 vehicles, as of 2017 (2.

480,000 vehicles) were basically the same; in 2018, the revenue of new energy bus business reached US $ 16.4 billion, with a long-term slight increase of US $ 400 million.
New energy vehicle subsidies for 2018 revenue 40.
700 million, significantly lower than 53 in 2017.

400 million, accounting for the proportion of new energy revenue from 33 in 2017.

3% dropped to 24.

8%.

New energy vehicles will be driven by complementary policies and driven by technology and markets. The elimination of superiors and disadvantages will accelerate, and the industry layout will be optimized. The company is expected to gradually increase its market share as a leader in new energy buses.

The gross profit margin was under pressure and the expense ratio rose during the period.

The company’s gross profit margin in 2018 was 25.

3%, about 26 gross profit margin in 2017.

3%, a slight decrease, mainly due to the compensation of the decline in 2018.

Looking at the quarter, the company’s gross profit margin for 2018Q1 / Q2 / Q3 / Q4 was 22.

7% / 20.

6% / 27.

3% / 28.

0%, except for the relatively slight increase in Q4 gross profit margin, the first three quarters have slightly decreased compared to 2017 (Q1 / Q2 / Q3 / Q4 gross profit margin in 2017: 24.

0% / 25.

6% / 26.

4% / 27.

6%).

Company period expenses 17.

23%, an increase of 2.

5 cases, of which the management expense ratio and sales expense ratio are 8.

3% and 7.

9%, increase by 2 respectively.

1 and 0.

83pcts.

High administrative costs are mainly due to an increase in research and development expenses over a ten-year period41.

45%, reaching 18.

63 ppm, the company’s R & D expenses are mainly used for the design and development of new bus, bus and high-end products.

In addition, the company’s accounts receivable bad debt provision is accrued1.

2.7 billion.

With the subsidy policy in 2019 to optimize the liquidation system, a portion of funds will be pre-allocated after the completion of sales and listing, which will gradually increase the company’s capital and the bad debt accrual pressure.

New energy vehicles enter the Latin American market, and overseas growth space is expected.

The company actively explores overseas markets. The comprehensive sales, service and spare parts network has covered six continents. New energy buses have entered high-end markets such as France and the United Kingdom. They can engage in mature and stable technologies, conditions and advantages, and demonstrate in mainstream markets in Europe.The operation has become the technical benchmark for buses worldwide.

In the fourth quarter of 2018杭州桑拿, the company will send 100 pure electric buses to Chile to create a record of overseas new energy bus orders. This order is the company’s first batch of new energy orders in Chile. Its Chilean market is expected to expand further in the future. PreliminaryRadiation in Brazil, Colombia, Uruguay and other markets is expected to open a new situation for the Latin American market.

With the continuous improvement of the company’s global competitiveness, the cost-effectiveness of its products has become increasingly prominent, and the growth of overseas new energy buses can be expected.

Risk factors: New energy bus sales are lower than expected; the cost of power batteries has fallen less than expected; new energy vehicle policy fluctuations.

Investment suggestion: Consider the company’s new product launch and increase competitiveness, and raise the company’s EPS forecast for 2019/20 to 1.

08/1.

14 yuan (previous forecast was 1.)
03/1.
08 yuan).

The company is currently leading by 13.

92 yuan, corresponding to 13/12 times PE in 2019/20.

In the short term, the company ‘s passenger car sales and profits are affected by subsidized return slopes and low industry prosperity. However, the company is a leader in the passenger car industry, with leading technology and manufacturing capabilities.Buy “rating.