Halma Technology (002595) 2018 Annual Report Comments: Performance Meets Expectations Casting Business Continues High Growth
The financial report commented that the performance was in line with expectations, and the casting business continued to grow at a high growth rate.36% of the companies released the 2018 annual report and achieved operating income of 37.24 ppm, an increase of 24 per year.36%; net profit attributable to mother 7.3.9 billion, an increase of 9 per year.36%, deducting non-net profit 7.12 ppm, an increase of 9 in ten years.31%.The company’s revenue growth was mainly at the same time that tire molds maintained a steady growth, and the casting business volume exceeded the expected growth.The company’s gross margin / net margin was 34.24% / 19.84%, a decline of 3 per year.13% / 2.71%, mainly due to the structural changes in products brought about by the rapid growth of casting business caused by rising raw material prices and increasing gross profit margins.The company’s period cost control is good, and the sales / management (including R & D) / financial expense ratios are 1.73% / 7.12% / 0.15%, change 0 every year.05% /-0.22% /-1.40%.  The mold industry has grown steadily, and the company’s market share has continued to increase. The company’s tire mold business has achieved revenue27.66 ppm, an increase of 15 in ten years.08%, revenue accounted for 74.28%, gross margin is 38.68%, a decrease of 0 per year.21.The attributes of consumables in tire molds and downstream demand mainly come from the increase in the number of tires and the acceleration of tire pattern replacement. At present, the global billion-dollar market will continue to grow steadily.The company is a global leader in tire molds, with a market share of over 25%. Thanks to cost, scale, efficiency, technology, quality, service and other advantages, the company continues to seize market share of peers, and its revenue growth rate far exceeds the industry.The share is expected to increase to 30% -40%.  The growth of the foundry business increased by 104%, and the production capacity gradually released sustainable and sustained high growth.27 trillion, a 103-year increase.51%, revenue accounted for 14.14%, gross margin is 21.89%, a decline of 7 per year.69.The company’s casting 杭州桑拿网 business mainly includes components such as compressors, wind power, gas turbines, internal combustion engines, pump valves, and general machinery. It has entered the supply chain system of customers such as GE, Siemens, Toshiba, and Caterpillar.The company’s first and second-phase power generation capacity is about 6 tons, and the third-phase power generation capacity is about 2 tons, and the accumulated improvements have been gradually added. The company’s casting business will maintain a sustained high growth.  Profit forecast and investment advice: The company is a global leader in tire molds, with a continuously increasing market share, and the casting business is expected to continue to grow rapidly. We expect the company’s net profit for 2019-2020 to be 9 respectively.26/10.89/12.31 trillion, corresponding to EPS 1.16/1.36/1.54 yuan, the current sustainable corresponding PE is 18/15/13 times.Maintain “Buy” rating.  Risk warning: exchange rate fluctuation risk; increased competition in the industry; raw material price fluctuation risk.