Yesterday, the market bottomed out and rebounded, the K-line formed a hammer line, and the Shanghai Composite Index fell by 0.17%. The stock market has not been very concentrated recently, and the market is still in a process of volatile bottoming out. However, Brother Niu saw that although the market conditions were a little weak, A shares showed substantial long-term benefits, that is, high cash dividends. The cash dividends of listed companies that return investors have begun to increase, which has brought sunshine and rain to value investment.
With the release of the "Guidelines for Disclosure of High-Exchange and Transfer for Listed Companies (Draft for Comments)" on the Shanghai and Shenzhen Stock Exchanges in April this year, the behavior of high-Exchange and Transfer for Transfer for Transfer for Transfer for Transfer for Transfer for Transfer for Transfer for Transfer for Transfer for Transfer for Transfer for Transfer for Transfer for Transfer for Transfer for Transfer for Transfer for Transfer for Transfer for The cash dividend list released by the Association of Listed Companies and the Shanghai and Shenzhen Stock Exchanges two months ago shows that the intention of the regulators is to pay cash dividends. Listed companies are indeed very powerful. In mid-2018, 101 of the 3,535 companies in the two cities had allocation plans, which is almost the same as last year (6 fewer). However, the number of cash dividends reached 85, and only 77 were cash dividends, and cash dividends became the mainstream. In terms of dividend amount, the total (including the plan not implemented) of Shanghai and Shenzhen stock markets was approximately RMB 62.06 billion, an increase of 57.79% from RMB 39.331 billion in the same period last year.
Why is it said that the growth of cash dividends is a long-term positive? Niu Brothers believes that this is reflected in three aspects.
First of all, cash dividends can reflect the strength of listed companies and indirectly prove the authenticity of the company's financial profits. Stock friends all know that they should stay away from junk stocks, but it is really hard to recognize which one is junk stock, because there are no words on the junk stocks. Sometimes they will rush over sea cucumbers and other things to go out to sea for a while, and go through financial accounts and other things to make investors dizzy. With the reality dividend mirror, everyone can honestly look for companies with high cash dividends. Cash dividends are real money taken out by listed companies, which shows that the company is not short of money and is a company responsible to investors. Of course, the most effective way to do after receiving the dividend is to continue to increase your position and invest in the company's stock, because there is nothing better than cash cows.
Secondly, cash dividends can enhance the attractiveness of A-shares. Since everyone knows that investing in real estate makes money quickly, the money goes to real estate; knowing that the interest rate is high, the money goes there and goes to the bankruptcy. Idle funds in society or institutional funds are both profit-seeking. Wherever there is money to make, go wherever you can make money. Profiting dividends from listed companies can attract low-risk funds to continue to flow into the stock market. As this inflow continues, a slow bull market in the A-share market will eventually form, and eventually form a siphon effect. It will bring about a big bull in the stock market for a long time, and it will also bring about strong capital allocation capabilities, which will stimulate the good and orderly operation of the economy.
Finally, cash dividends can promote self-discipline of listed companies, increase corporate social responsibility, promote market value management of listed companies, and unify the interests of shareholders of all sizes. For a long time, the contradiction between major shareholders and small and medium shareholders has been concentrated on the design of the mechanism for the distribution of interests. Standardizing cash dividends for listed companies and including them in market value management will create a good situation where major shareholders and small and medium shareholders jointly safeguard the fundamental interests of listed companies. This will play a role in truly stabilizing the stock price, reducing conflicts of interest between major shareholders and small and medium shareholders, and forming a good and harmonious shareholder relationship.
Gree Electric Appliances: Healthy fundamentals, air conditioners are particularly promising
Gree Electric Appliances 000651
Research institution: Anxin Securities Analysts: Zhang Licong, Wang Xiubao Date of Writing: 2018-09-03
Event: Gree Electric Appliances announced its 2018 interim report. The company achieved revenue of 51.98 billion yuan in Q2 2018, YoY+30.0%; performance of 7.22 billion yuan, YoY+32.9%, and non-recurring performance of YoY+56.7%, slightly exceeding expectations. The company plans to pay 0.6 yuan per share (tax included), with a total dividend of 3.61 billion yuan, accounting for 28.2% of the net profit in 2018H1. As for the company's 2018 interim report, its performance continued to perform well. If we consider the fair value loss of foreign exchange derivatives caused by the rapid depreciation of the RMB in Q2, its actual operating performance will be more impressive. We are optimistic about the long-term growth space of the air conditioning industry and remain optimistic about the company's prospects.
2018Q2 performance slightly exceeded expectations: According to the announcement, the company's total profit in 2018H1 was 15.3 billion yuan, higher than the 14.62 billion yuan previously released by the Guangdong State-owned Assets Supervision and Administration Commission; the company's other current liabilities and sales rebates under this account were basically the same year-on-year, and the performance growth was benign.Q2 performance YoY+56.7% was exceeded expectations, and the main changes in non-recurring gains and losses were investment income/fair value changes. The company lost 690 million yuan due to changes in fair value of derivative financial instruments in H1 in 2018 (revenues of 40 million yuan in the same period last year), which is expected to be caused by the rapid depreciation of the RMB in Q2. YoY-67% prepayment was received at the end of June. We believe that the reduction in prepayment was due to some dealers not rushing to prepare stocks at the end of June after completing the pickup task. On the other hand, it is also related to the company's relaxation of financial policies for dealers. We recommend focusing on the payment situation of dealers after the opening of the new cold year from August to September. At present, the dealer's feedback on inventory pressure is still controllable, and the industry's prosperity in the second half of the year may be better than pessimistic expectations. According to industry online data, the domestic sales of air conditioners in July, YoY-5.1% growth rate slowed down compared with the first half of the year, but Gree's sales of YoY+6.1%, and Gree is expected to maintain a trend higher than the industry's growth rate.
Q2 gross profit margin- sales expense ratio increased year-on-year, accounting estimate adjustment led to an increase in administrative expense ratio: the company's Q2 gross profit margin repair was lower than expected, but the gross profit margin-sales expense ratio increased by 2.4pct year-on-year. Gross profit margin declined year-on-year. In addition to the pressure of raw material cost and the RMB exchange rate against the US dollar in Q2 lower than the same period last year, it is expected to be related to the company's policy of incentivizing dealers to pick up goods. The decline in sales expense ratio confirms that the air conditioning industry has been in good prosperity in the first half of the year, and the company has saved some promotional expenses. The management expense ratio has increased, and the largest increase year-on-year is: employee salary is 720 million yuan, material consumption is 650 million yuan and depreciation is 290 million yuan. The increase in depreciation is mainly because the company changes its accounting estimate policies from the beginning of the year to increase the annual depreciation rate of houses, electronics and transportation equipment. The company expects to reduce its net profit by about 550 million yuan throughout the year.
The growth of household appliances exceeded expectations: the company's household appliance revenue in 2018H1 YoY+55.7%. In addition to the small base, the high growth of household appliances is related to the company's emphasis on Jinghong Home Appliances and the effectiveness of sales expansion in some cities. H1's company's smart equipment revenue is YoY-63.0%, which may be due to the reduction in Yinlong's procurement.
Investment advice: At present, the market is mainly concerned about whether the prosperity of the air conditioning industry is sustainable. We believe that the downward trend in the real estate market will not put too much pressure on the air conditioning industry. The increase in the penetration rate of third- and fourth-tier/rural areas + consumption upgrades are still expected to support the steady growth of the industry leaders in the medium and long term. We are optimistic about the long-term growth space of the air conditioning industry and also look forward to the company's diversified layout providing additional growth momentum. It is expected that the company's EPS will be divided into 4.65/5.30/6.05 yuan from 2018 to 2020; the investment rating of Buy-A is given, with a target price of 53.0 yuan for 6 months, which is equivalent to a 10-fold dynamic price-to-earnings ratio in 2019.
Risk warning: Real estate downward exceeds expectations, raw material prices rise sharply, and the risk of deterioration of the foreign trade environment.
Midea Group 2018 interim report performance review: High-end strategic transformation initially shows results, interim report performance meets expectations
Midea Group 000333
Research institution: Shenwan Hongyuan Analyst: Zhou Haichen Date of writing: 2018-09-04
Company's interim report performance meets expectations. In the first half of 2018, Midea achieved operating income of 142.624 billion yuan, a year-on-year increase of 14.6%, and net profit attributable to shareholders of 12.5 billion yuan, a year-on-year increase of 26.37%, and net profit attributable to shareholders of 12.937 billion yuan, a year-on-year increase of 19.66%; among them, operating income in the second quarter was 72.336 billion yuan, a year-on-year increase of 11.81%, and net profit attributable to shareholders of 7.681 billion yuan, a year-on-year increase of 18.92%.
air conditioning leads the high growth of white goods business, and the effect of high-end strategic transformation is beginning to show. 1) By product, the growth rate of air conditioning revenue in the first half of the year reached 27.69%; the growth rate of consumer appliances slowed down to 6.66% in the first half of the year, of which the growth rate of washing machine revenue was 15.67%, and the growth rate of refrigerator revenue was expected to be about 10%. Small household appliances were dragged down by the kitchen appliance business. 2) In terms of quantity and price, according to industry online statistics, Midea's sales of air conditioners, refrigerators and washing machines increased by 11%, 2% and 8% respectively in the first half of the year, among which the growth rate of domestic sales was faster than exports. From the perspective of Zhongyikang's average retail price, it increased by 7.12%, 28.9% and 21.57% respectively, and the high-end strategic transformation of the product began to show results. 3) By channel, the company's entire network retail sales increased by 33% year-on-year in the first half of the year, and online revenue is expected to account for more than 30%; accounts receivable and notes increased by 23% year-on-year, and prepayments decreased by 22.4%, mainly due to the increased support for upstream and downstream funds and the cooperation with the group's high-end transformation strategy. The company's revenue growth rate is expected to remain 15%-20% throughout the year.
Toshiba Global turnover is expected, and Kuka's localized operation has great highlights.The company's export revenue slowed down to 5% in the first half of the year, mainly due to overseas trials of independent brands, removing some low-end OEM businesses and Kuka's revenue growth rate was lower than expected: 1) The company accelerated the integration of Toshiba's project in the first half of the year, and the profit side was basically the same, achieving double-digit growth in its own brand revenue. It is expected to turn losses into profits throughout the year through overseas regional headquarters pilots, introduction of branch product manager system and e-commerce and other incremental channels. 2) In the first half of the year, Kuka's business revenue fell by 11.2% year-on-year (euro caliber), mainly affected by the United States' tariffs on European cars and the recession in the European economy. However, the net profit margin rose to a new high of 4.8% in the second quarter. We expect that with the establishment of a joint venture in China, it is expected to accelerate business expansion and reduce dependence on the European market.
gross profit margin increased against the market, and there is a lot of room for improvement in amortization decline. The company's gross profit margin increased by 1.93 pcts year-on-year to 27.16%, of which the gross profit margins of HVAC and consumer appliances increased by 1.04 and 0.28 pcts respectively, which may be related to the improvement of automation level (150 units/10,000 people increased to 625 units/10,000 people); the gross profit margin of robots increased by 9.73%, mainly due to the decline in premium amortization expenses (amortized about 2.4 billion yuan in 2017 and amortized 600 million yuan in 2018). In terms of period expenses, the decline in management expense ratios and financial expense ratios hedge the increase in sales expense ratios, which combined resulted in an increase in net profit margin by 0.38 percentage points to 9.07%. We expect the company's profit to grow by about 20% in 2018.
profit forecast and investment rating. Up to now, the company's cumulative repurchase amount is about 1.8 billion yuan, and actively implementing its stock repurchase commitments demonstrates confidence. We adjusted the company's 2018-2020 earnings forecast EPS to be 3.13 yuan, 3.88 yuan and 4.50 yuan (the previous values were 3.29 yuan, 3.78 yuan and 4.29 yuan), corresponding to dynamic price-to-earnings ratios of 13 times, 11 times and 9 times, maintaining the "buy" investment rating.
SF Express Holdings: Benchmarking overseas giants, look at SF Express growth space
SF Express Holdings 002352
Research institution: Anxin Securities Analyst: Sha Mo, Mingxing Date of Writing: 2018-08-13
Japanese and US express delivery market has experienced 3 rounds of rise: The first stage: The express delivery industry has experienced rapid development, fierce competition, severe price wars, and enterprises have carried out large-scale capital expenditures; due to the decline in profitability of US express delivery companies, the stock price performance is not outstanding; Japanese transportation companies enter the express delivery market to reverse the current situation of corporate losses, and the excess stock price returns are obvious. The second stage: the industry oligarchs form, prices stop falling, capital expenditure slows down, operating profits gradually rebound, and excess returns are the most obvious. The third stage, benefiting from the rapid development of the Japanese and American online shopping market, the industry faces new development opportunities.
SF Express has the potential to actively improve profitability in the short term: summarizing the experience of the Japanese and American express delivery industry, the foreign industry has stabilized, the concentration has increased, the price has rebounded, capital expenditures have slowed down, domestic enterprises have increased revenue and reduced expenditures, and guaranteed the company's long-term investment value. Compared with SF Express, in terms of external environment, the business parcel market structure is relatively stable, but there are still potential competitors, so it may not have the basis for price increase and capital expenditure slowdown; internally, the company conducts new business and tightens costs, the company has excellent operating quality, new business gradually reduces losses, and operating efficiency continues to improve, and the company has the potential to actively improve profitability in the short term.
There is still room for traditional businesses, and new businesses are more growth-oriented: compared with FDX, UPS, YAMATO and SF Holdings, the unit price of SF Express is the lowest due to product structure and cost. The frequency of use of business parcels in China is about 60% of that in the United States, and there is still room for growth; there is still a difference with large companies in infrastructure construction, but the ROA level is relatively high; the development stage and path are most similar to FDX, but in new businesses, companies may face a market with a longer return cycle and greater room for return; in mature markets, the PE valuation center depends on the growth rate of the express market. It is expected that the regional business parcel market growth rate will be around 15% in the next five years, ensuring SF Express’s 25-30 times PE valuation level.
Investment advice: SF Holdings has excellent operating quality, new businesses have gradually reduced losses, and operating efficiency has been continuously improved. The company has the potential to actively improve profitability in the short term. Compared with mature and successful foreign companies, SF Holdings has better asset utilization capabilities and greater market space. We expect the company to achieve net profit attributable to shareholders of RMB 49, RMB 63 and RMB 7.9 billion from 2018 to 2020, corresponding to PE of RMB 39, RMB 30 and RMB 24 times, maintaining a buy-A rating, with a target price of RMB 58.
risk warning: There are potential entrants, capital expenditure speed is accelerated, costs are rising, etc.
