Huanxu Electronics (601231) 2019 Third Quarterly Report Review: High Season Drives UWB Product Prospects

Huanxu Electronics (601231) 2019 Third Quarterly Report Review: High Season Drives UWB Product Prospects

Event: The company released the third quarter report of 2019, and the company’s first three quarters of revenue (259.

710,000 yuan, +17.

27%), net profit attributable to mother (8.

610,000 yuan, +10.

76%), net of non-attributed net profit (7.

1.6 billion, -5.


Investment Highlights: The peak season of the industry drove the company’s profitability up in the third quarter and its performance rebounded.

Company revenue for the first three quarters of 2019 (259.

710,000 yuan, +17.

27%), net profit attributable to mother (8.

610,000 yuan, +10.

76%), net of non-attributed net profit (7.

160,000 yuan, -5.

18%), of which single-quarter revenue in the third quarter (113.

700 million, +21.

68%), net profit attributable to mother (4.

710,000 yuan, + 22.

39%), net of non-attributed net profit (4.

6.6 billion, +25.


Net profit after deduction for the first three quarters of 2019 is (7.

1.6 billion, -5.

18%), mainly due to the substantial increase in the amount of non-recurring gains and losses of the company (1.

44 trillion, +554.


The company’s 2018 annual report and 2019’s interim report showed negative growth in net profit attributable to the mother, and the third quarter of 2019无锡桑拿网 achieved transformation, mainly due to consumer electronics products, communications products in the second half of the year to replace the peak season revenue growth and industrial productsIncome continued to grow at a rapid rate.

The demand for industrial products fluctuates slightly. At this stage, the market demand is clear. If it is sustainable next year, it is expected to continue to grow.

Gross profit margin decreased slightly, and the speed of R & D investment continued to increase.

The company’s gross profit margin for the first three quarters (9.

90%, -0.


In the first three quarters, communication products accounted for 35%, consumer electronics accounted for 36%, and the annual performance of computers and storage was under pressure, accounting for 11%. Industrial products experienced rapid 夜来香体验网 growth, accounting for 12%.

Automotive electronics accounted for 5% of the total environmental impact.

Since industrial products are new products, some learning processes are still needed during the introduction of products from Mexican plants, and the cost side still needs to be controlled, so its rapid rise in proportion has reduced the company’s gross profit margin.

In addition, higher computer and storage revenues from higher gross profit margins have also caused shifts in product gross profit margins.

In terms of three fees, the company’s sales expense ratio (0.

9%, + 0% pcts), overhead rate (5.70%, +0.

08pcts), financial expense ratio (0.

03%, +0.


In terms of sales expenses, shipping costs and export expenses have been increased to cope with the expansion of overseas plants, which is the same as the trend of revenue growth.

Management expenses in a single quarter mid-decade 6.

73%, controlled.

In terms of research and development expenses, the company’s third quarter expenditure (9.

5.3 billion, +12.


The company plans to participate in revenue growth in research and development expenses and sales expenses in the future.

Company bills receivable (0.

310,000 yuan, +40.

91%), accounts receivable (77.

900,000 yuan, +10.

03%), inventory (50.

870,000 yuan, + 3.

94%). Accounts receivable have improved with the increase in company revenue. The increase in inventories indicates that the company is preparing for an increase in pickup in the peak season.

Cash flow from operating activities in the third quarter3.

42 trillion, compared with the same period last year, from negative to positive.

The addition of UWB products strengthens the company’s wireless communication product strength and has a bright future.

The company’s new UWB this year has many advantages such as high positioning accuracy, good security, high transmission rate, large system capacity, can be reduced, and strong anti-interference ability.

Now UWB technology has reached a setting method that can accurately estimate the position using the coordinates of the surrounding mobile device.

In practice, the accuracy can be further reduced to 5 mm level, far exceeding Bluetooth 5.

0 1 meter accuracy with Wi-Fi.

In addition, UWB also has a high-speed data transmission function.

UWB technology has great potential in terms of equipment interconnection, close-range high-speed, and advanced information transmission.

Future iOS devices, Android devices, and smart home devices can enhance the interconnected experience through UWB, and the market is vast.

The company’s profitability will gradually increase with the continuous penetration of products.

Investment recommendations We expect the company’s net profit attributable to its mothers to be 12 in 2019-2021.

87 billion, 15.

8.8 billion and 19.

9.3 billion, EPS is 0.

59 yuan, 0.

73 yuan and 0.

92 yuan, corresponding to PE is 23, 19, 15 times.

According to 24 times PE in 2020, the corresponding target price is 17.

52 yuan / share, give “Buy” rating.

Risk reminder: The company’s Hong Kong, Macao and Taiwan and overseas product sales account for 68%.

61%, there is a risk of exchange rate fluctuations; the company’s customer concentration is high, and there is a risk of customer dependence; the company’s receivables increase significantly, and there is a risk of repayment lag; the company’s main raw materials are electronic components such as ICs, PCBs, etc.Price fluctuations are large, and there is a certain risk of price fluctuations of raw materials.