Liangxin Electric (002706): Increasing R & D Layout, Future Revenue Growth Attempts to Rebound

Liangxin Electric (002706): Increasing R & D Layout, Future Revenue Growth Attempts to Rebound
Affected by the economic growth rate, the annual growth rate of revenue has declined year by year. Impairment losses have affected the profit of Q4. The company published its 2018 annual report and realized revenue of 15.74 ppm, a ten-year increase of 8.38%, of which Q4 realized income 3.48ppm, Q1-Q4 quarterly revenue growth rate was 13 respectively.82%, 11.00%, 7.61% and 1.The growth rate of income decreased by 45% quarter by quarter, mainly due to the effects of macroeconomic fluctuations, land allocation policies and the “531 New Deal” for photovoltaics, and total downstream demand.The company headquarters realized net profit attributable to mother 2.22 ppm, a five-year increase of 5.60% of net profit of non-returned mothers1.81 ppm, a ten-year increase of 8.00%, of which Q4 realized net profit attributable to mother only 2.21 million yuan, and a significant decrease of 91.87%, the initial estimate is the impact of increased income, the inclusion is that Q4 single-quarter accrual impairment loss reached 10 million (including goodwill impairment of 4.9 million yuan).The company’s senior management realized net operating cash flow2.6.2 billion, a previous major increase of 52.93%, reflecting the company’s solid operating capabilities. The gross profit margin reached a new high, increasing the investment in R & D. In the future, the company’s gross profit margin will reach 40 in 2018.84%, an increase of 2 per year.2pct, a new record high, with gross margins of 43 for terminal and distribution appliances.74% and 41.56%, increasing by 2 each year.69 and 2.01pct, the increase in the proportion of high-margin dual power transfer switches and changes in raw material prices are primary, and it also reflects customers’ higher awareness of the company’s products.The company’s maximum expenses total 26.71%, an increase of 1 per year.87pct, mainly due to the significant increase in research and development costs.The company incurs up to R & D expenses1.390,000 yuan, an increase of 32 in ten years.23%, R & D expense ratio reached 8.84%, an increase of 1 per year.59 points.While continuing to expand the scale of product upgrades, the company is actively deploying high-voltage DC contactors and smart home products to lay the foundation for future business expansion. Absolute impact is reduced, business development is expected to open up a new situation. In 2019, the overall real estate policy will remain stable as a whole. The company’s real estate industry revenue is expected to continue to increase in key major customers Country Garden, China Shipping and China Happiness.In 2019, the photovoltaic policy is gradually correcting, wind power installed capacity has been steadily improved, and the company’s new energy industry business will steadily recover.2019 is the start-up year for 5G construction, and the company’s communications products promote continued benefits.The company began to build a Haiyan base in 2019, mainly producing components and electronic products, molds, and injection molded parts for low-voltage electrical appliances, which will effectively enhance the company’s overall industrial chain layout and overall profitability. Investment suggestion As a domestic leader in the field of high-end and low-voltage electrical appliances, the gap between the company’s technical level and international brands has gradually narrowed, and the advantages of prices and services have gradually emerged, and the prospect of domestic substitution is optimistic.We estimate the company’s net profit attributable to its parent to be 2 in 2019-2021.77, 3.37 and 4.160,000 yuan, an increase of 25 in ten years.0%, 21.4% and 23.4%, corresponding to 19, 15 and 12 times the current expected PE.Considering the company’s industry synthesis in the field of domestic 杭州夜网论坛 mid-to-high-end low-voltage electrical appliances and the company’s estimated situation in the industry, the company’s compound growth rate for the 2019-2021 three-year period22.5%, giving the company a PEG equal to 1 corresponding to a 23x 2019 valuation, and a reasonable value of 8 was determined.05 yuan / share, maintain “Buy” rating. Risks prompt macroeconomic growth rate; real estate industry policy adjustments; new energy investment is less than expected.