Automobile and auto parts industry: stable profitability and steady growth in performance

A research report on the automobile and auto parts industry was released on May 6. The summary of the report is as follows:

Overall situation:

In 2015, the operating income of the automobile industry increased by 7.9%, and the net profit attributable to the parent increased by 16.0% year-on-year. In the first quarter of 2016, the operating income of the automotive industry increased by 12.5% ​​year-on-year, and the net profit attributable to the parent increased by 14.6% year-on-year. The decrease in the proportion of investment income contributed by joint ventures in the automobile industry in the net profit attributable to the parent in 2015 was mainly due to the decline in the proportion of the passenger car segment, which was related to the decline in the proportion of joint venture sales in 2015 and the increase in the proportion of sales of independent brands.

Profitability and operating conditions:

• 1) The net profit margin of the automotive industry in 2015 was 6.0%, a year-on-year increase of 0.3%. Among them, the net profit margin of commercial buses increased year-on-year and the sales of large and medium-sized passenger cars stabilized at its core profit point, and the sales of new energy (1478.51, -59.710, -3.88%) passenger cars increased; The decrease in expense ratio is related to the increase in non-operating profit and loss. The net profit margin of the automobile industry in the first quarter of 2016 was 6.2%, an increase of 0.4% over the same period in 2015. Among them, the net profit margins of commercial passenger vehicles, automobile sales, and passenger vehicles increased by 0.7, 0.3, and 0.3% respectively. The decline.
• 2) We measure the cash flow of the automobile industry by the sum of net operating cash flow and the added value of notes receivable. In 2015, the adjusted operating net cash flow of the automobile industry was 108.56 billion yuan, a year-on-year increase of 24.1%, which is at a relatively high level. In the first quarter of 2016, the adjusted operating net cash flow of the automobile industry decreased by 16.06 billion yuan compared with the same period in 2015. Among them, the passenger vehicle segment includes SAIC Motor (19.79, -0.360, -1.79%) and BYD (61.20, -2.270, -3.58). %) The adjusted net cash flow decreased by RMB 12.34 billion and RMB 4.10 billion year-on-year, respectively, which was the main reason for the significant year-on-year decrease in the adjusted net cash flow of the auto industry in the first quarter.

ROE decreased year-on-year in 2015, and ROE in the first quarter of 2016 decreased year-on-year and quarter-on-quarter. The ROE of the automotive industry in 2015 was 16.9%, a decrease of 0.5 percentage points year-on-year. , The month-on-month decrease of 0.6% was mainly related to the decline in the turnover rate of total assets.

Investment Advice

Judging from the 2015 annual report and the first quarter report of 2016, the overall operation and profitability of the automotive industry are basically stable. From a fundamental point of view, 2016 is a big year for the automotive industry. Under the background of stable macroeconomic growth, the tone of the automotive policy is upward, and the intensity and breadth may exceed 2009. The demand for passenger cars and commercial vehicles in the narrow sense is expected to increase. In terms of valuation, the valuation of some blue chips in the automotive industry is at a low level, reflecting too many pessimistic expectations that cannot be fulfilled. The decline in interest rates, the upward industry and the increase in dividend rates provide blue chip stocks in the automotive industry with greater flexibility in valuation repair. From the perspective of cyclical recovery, we recommend China National Heavy Duty Truck (16.18, -0.510, -3.06%), Weifu Hi-Tech (18.64, -0.7700, -3.62%), and Jianghuai Automobile (11.65, -0.360, -3.06%). %), Foton Motor (5.03, -0.300, -5.63%); We recommend Jiangling Motors (24.65, -0.350, -1.40%), SAIC, Great Wall Motors (8.60, -0.340, -3.80%) in other molecular fields And other vehicle leaders, as well as Huayu Automobile (14.38, -0.590, -3.94%), Jingwei (13.62, -0.440, -3.13%), Yunnei Power (7.26, 0.060, 0.83%), Fulin Precision (0.00 ,0.000,0.00%) and other parts companies. In addition, the reform of state-owned enterprises (1271.58, -40.710, -3.10%) will continue to be the main line throughout 2016. We recommend Fawer shares (7.42, -0.310, -4.01%) and China National Heavy Duty Truck, and we recommend paying attention to FAW Car (12.32, -4.01%). -0.430, -3.37%), ST Xiali, China Automobile Research Institute (8.43, -0.150, -1.75%).

risk warning

The macro-economy fell short of expectations; the auto industry’s prosperity was declining; and policy advancement was less than expected. The performance of related targets is beautiful: cross-border communication (34.09, -1.410, -3.97%) (estimated revenue of 10 billion + in 2016, continuing to refresh market expectations), Antarctic e-commerce (19.56, -1.540, -7.30%) (expected to cut into the Internet) Red brand and cross-border business). (2) The overall growth of the first quarter report of the cotton spinning industry chain was good, the cotton price bottomed out, and the fundamentals of the industry showed a trend of recovery: Lutai A (11.10, -0.140, -1.25%) (industry leader, PB1.6 times, corresponding to 16 Annual PE12 times), Huafu Mélange (10.50, -0.270, -2.51%) (it is expected to integrate upstream and downstream industrial chains to create a fashion industry ecosystem), Blum Oriental (6.21, -0.190, -2.97%) (benefit from TPP, Overseas production capacity is gradually released). (3) Relevant targets for overseas M&A: Shandong Ruyi (16.71, -1.150, -6.44%) (the group plans to acquire SMCP, an overseas light luxury group), Shangying Global (26.72, -0.350, -1.29%) (expected overseas mergers and acquisitions). (4) Low-valuation and stable varieties: Hailan Home (10.90, 0.110, 1.02%) (the operation is expected to increase steadily throughout the year, corresponding to 12 times the 16-year PE), Semir apparel (11.44, -0.050, -0.44%) (performance The growth is steady, and children’s wear maintains a high growth rate, corresponding to 18 times the 16-year PE).