Keyuan (002380): 1Q19 performance slightly exceeded expectations Smart factory attempts to accelerate

Keyuan (002380北京夜生活网): 1Q19 performance slightly exceeded expectations Smart factory attempts to accelerate
1Q19 results slightly exceeded expectations Keyuan shares announced 1Q19 results: 1Q19 operating income1.23 ppm, an increase of 37 in ten years.6%; net profit attributable to the parent company is 11.39 million yuan, an annual increase of 36.5%, corresponding to a relative profit of 0.05 yuan, deducting non-net profit of 10.74 million yuan, an annual increase of 67.3%, slightly exceeding our expectations, mainly due to the downstream and downstream chemical industry’s increased demand for industrial automation and industrial Internet products, orders fell to increase the company’s revenue. Profitability remained stable.In the first quarter of 19, the company’s comprehensive gross profit margin decreased slightly by 0.2ppt to 41.1%, the company’s sales / management + R & D / financial expense ratios are -2.1 / -6.5 / + 4.4ppt, during which the overall expense ratio decreased by 4.1ppt, but because the non-recurring income decreased compared to the same period last year, the overall net profit of the company in 1Q19 remained basically stable at 9.2%. Ample cash in hand.As of the first quarter of 19, the company’s book cash and transactional financial assets totaled 11.33 trillion, maintaining a high level; 1Q19 company’s operating cash decreased by 14.85 million yuan, which was basically the same as the same period last year. The development trend is based on the process automation industry, and the Industrial Internet business has achieved initial results.The company officially launched the industrial Internet platform EmpoworX in 2017, and was replaced by the Ministry of Industry and Information Technology as an industrial Internet demonstration platform.In 2018, the company’s industrial internet platform revenue reached 1.700 million, the benefits are beginning to show.With the acceleration of 5G commercialization, enhancement of computing power at the edge of equipment, and policy support, we are optimistic about the long-term development of the Industrial Internet. The safety and rectification of the chemical industry has accelerated, which is beneficial to the company’s smart factory business.The company has cultivated smart plants and smart chemicals for many years and has a deep understanding of the industry.The recent “3 ~ 21” accident in Xiangshui, Jiangsu has caused the country to highly anticipate the production safety of chemical companies. We expect that the national chemical parks will be digitalized and the information transformation will speed up.The company’s current 1Q19 related orders and revenue have increased, we are optimistic about the company’s future success and first-mover advantage to get more orders. Earnings Forecast Taking into account the recent smart factory order catalysis, we have raised the company’s 2019 / 20e earnings forecast8 respectively.8% / 10.4% to 0.67 yuan / 0.83 yuan. Estimates and recommendations The company currently expects to correspond to 24/20 times P / E in 19/20, maintaining the recommendation level, and considering the upward revision of profit forecast, we will start with a target price of 18.53 yuan increased 9% to 20.15 yuan, corresponding to 30/24 times P / E in 19/20, which is 23 compared with current expectations.5% growth space. The advancement of risk projects leads to an increase in the company’s cash.