Kodali (002850): Increase in gross profit margin of core business and continuous improvement of production capacity layout

Kodali (002850): Increase in gross profit margin of core business and continuous improvement of production capacity layout
Kodali’s 1H19 results exceeded our expectations and announced the first half of 2019 results: operating income11.70,000 yuan, an increase of 46 in ten years.7%; net profit attributable to mothers is 80.25 million yuan, an annual increase of 259.2%, corresponding to a profit of 0.38 yuan, exceeding our expectations, mainly due to the company’s capacity release, the gross profit margin of the lithium battery structure business increased. Lithium battery structural parts business has grown rapidly, and gross profit margin has increased.1H19 company’s lithium battery structure business income was 10.50,000 yuan, an increase of 67 in ten years.3%, the gross profit margin increased by an average of 10.1ppt to 24.8%; the increase in gross profit margin of lithium battery structural parts is mainly due to the release of economies of scale, strengthened cost control, and 1H19 aluminum and other major raw material prices fell slightly.1H19 automotive structural parts, other structural parts business income was 0.8/0.500 million, the previous change -49.8% / 183.0%.1H19’s consolidated gross profit margin was 24.3%, an increase of 8 per year.7ppt.Among them, the 2Q19 company’s comprehensive gross profit margin increased by 13.7ppt to 28.0%. Cash flow from operating activities improved significantly.Thanks to economies of scale and strengthened cost control, the company’s sales in 1H19 decreased the management expense ratio by 0.6/0.7ppt to 2.0% / 4.6%.The company increased its R & D efforts in lithium battery safety and other fields, and the R & D expense ratio increased by more than 2 in 1H19.5ppt to 5.8%.1H19 Net cash inflow from operating activities2.5 trillion, earlier 1H18 net inflow of 0.900 million increase of 167.The increase of 5% was mainly due to the increase in the company’s revenue scale, the increase in cash inflows in the provision of goods and services, and the expansion of the company’s bill discounting scale. Development trend The installed capacity of lithium batteries continues to increase, and the production capacity layout is constantly improved.On January 天津夜网 7, 2019, China’s power battery installed capacity was 34.7Gwh, an increase of 77 per year.0%, of which the installed capacity in July increased by 34 each year.3%, continuing rapid growth.From January to July, the company’s major customers, CATL, BYD, AVIC Lithium, and Xinwanda, achieved rapid growth in installed capacity, which guaranteed the company to expand more market share.At present, the company has completed the construction of the second phase of the Jiangsu and Dalian production bases, and plans to invest 2.The US $ 500 million construction of the first phase of Fujian’s power battery structural components project is mainly for supporting CATL production capacity.After the project is in production, the company is expected to achieve an average annual income of 700 million yuan.We believe that the company will continue 杭州桑拿 to improve the company’s competitive advantage by approaching downstream customers’ production capacity layout, and cooperating with customers in research and development, and deep binding. Earnings Forecasts and Estimates As the company’s earnings exceeded expectations, we raised our 2019/20 earnings forecast55.3% / 60.3% to 0.97/1.30 yuan.The company currently expects a 2019 / 20e P / E of 25.6x / 19.2x, maintain neutral rating, consider raising earnings forecast, raise target price by 16.7% to 28.00 yuan, corresponding to 2019 / 20e P / E is 29x / 22x, corresponding to the current ongoing 12.4% space. Risks New energy vehicle sales risk, lithium battery structural parts price decline risk.