Liangxin Electric (002706) Comment Report: Net profit in the fourth quarter surpassed the expected development trend, brewing new growth

Liangxin Electric (002706) Comment Report: Net profit in the fourth quarter surpassed the expected development trend, brewing new growth
Event: On February 28, 2019, the company announced a performance bulletin to forecast the company’s revenue in 2018.7.3 billion (+8 year-on-year.38%), to achieve a net profit of 2.21 billion (+5 year-on-year.54%). Opinion: Revenue is in line with expectations, and the company’s various businesses are advancing normally.Our previous forecast for the company’s revenue in 2018 is 15.500,000 yuan, the company reported revenue of 15.7.3 billion is basically in line with our expectations.It is estimated that the company’s 2018 Q1 / Q2 / Q3 / Q4 revenue was 3 respectively.25/4.77/4.24/3.400 million; single quarter quarterly growth rate was 13.82% / 11.00% / 7.61% / 0%.The company’s single quarter revenue growth rate is expected to gradually reach the expected level of photovoltaic 531 policy in the second half of 2018 (domestic PV installations Q3 / Q4 gradually decreased 55).46% / 12.12%), the area of newly completed real estate expanded (Q3 / Q4 fell by 13).41% / 3.14%) and the impact of reduced OEM revenue. Affected by rising research and development costs, the company’s Q4 net profit performance was less than expected.As some of the company’s new products are entering the R & D or introduction phase, the increase in R & D expenses in the second half of 2018 has shifted.We judge that the company’s staged rise in research and development expenses and a slight increase in financial expenses have caused the company’s Q4 net profit performance to be lower than expected. In the second half of 2018, the influencing factors gradually subsided, and the company’s performance will return to the normal track.With the initial correction of higher photovoltaic policies, there is a high probability that photovoltaic installations will increase in 2019 and remain stable in 2018.Judging from the tendering in the beginning of 2019, there is a certain tide of wind power supplementary installations, which is expected to increase by more than 25% compared to 2018.Real estate demand for low-voltage electrical appliances will also improve as liquidity structure improves.We believe that the gradual elimination or improvement of the above key factors affecting the revenue growth rate in the second half of 2018 will guide the company’s 2019 revenue growth rate back to the normal track. Improve the layout of the supply chain and prepare for a structured incremental market.The company’s current model is to order production with sales, and there is not much inventory.The Haiyan base that the company recently started investing in helps the company update its product structure and strengthens its ability to control the supply chain.From the perspective of the future flexibility of the industry, due to the growth in demand for 5G construction and new energy generation, and the installation of new energy vehicles, we believe that the future telecommunications and new energy sectors will be the company’s faster-growing markets.The base construction will also bring new increments to the company in these aspects. Profit forecast and estimation: Considering that the company actively enters the new energy industry while the construction industry continues to deepen, we adjust the company’s EPS forecast for the company’s 18-20 years to be 0.28, 0.36, 0.46 yuan, corresponding to a surplus of 21 in the 深圳spa会所 market.12, 16.69, 12.93 times, continue to give its “strong recommendation” rating, adjust its target price to 7 at 20 times price-earnings ratio.2 yuan. Risk reminders: the total demand of the new energy industry; the breakdown of the demand of the real estate industry; the new energy vehicle industry’s development is less than expected; the downstream industry’s bargaining power substitution.