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Qingdao Haier (600690): Deepening the distribution of gross profit margin or pressure

Qingdao Haier (600690): Deepening the distribution of gross profit margin or pressure
Established a brand development leader and maintained a “Buy” rating. On April 29, 2019, the company disclosed its 2018 annual report and 2019Q1 quarterly report, and its total operating income for 2018 was 1,833.1.7 billion, +12 a year.17%, net profit attributable to mother 74.400,000 yuan, +7 a year.71%, net profit after deduction is +17.38%.Total revenue in Q1 2019 was 480.43 trillion, ten years +10.17%, net profit attributable to mother 21.36 trillion, ten years +9.41%, plus +7 for the next ten years.12%.Slightly lower than expected, the company plans to distribute a cash dividend of 3 per 10 shares to all shareholders.51 yuan (2016-2018, the dividend rate remains 30%, corresponding to each end breakdown rate is 2 respectively.5%, 1.8%, 2.5%).We expect the company’s EPS to be 1 in 2019-2021.38, 1.62, 1.87 yuan, maintaining the company’s “Buy” rating. Domestic branding and complete sets to improve the drainage capacity of various channels. Domestic 南宁桑拿 revenue benefited from consumption upgrades. The company strengthened the development strategy of multi-brand complete sets of home appliances and combined with expansion of channels such as building materials and micro-stores, the drainage capacity of each channel improved.The company’s domestic sales revenue was 1,058 in 2018.18 trillion, +15 for ten years.25% (domestic market refrigerators, washing machines, air conditioners, kitchen appliances, water heaters revenue + 14%, + 13%, + 9%, + 16%, + 9% respectively).The domestic brand diversified brand layout realized differentiated growth, and the high-end brand Casa Di Jian’s revenue exceeded + 44% (more than 1,800 Casa Di Jian stores in 2018).Young positioning brand commander income + 30% per year. The synergy effect of overseas sales was continuously deepened. The synergy effect of overseas business continued to appear, and the operation efficiency was improved.Purchasing, supply chain, and technological innovation work together in unison to accelerate product updates and achieve a leading position in regional market growth.Overseas revenue in 2018 was 766.7.7 billion, +7.98% of which GEA’s USD revenue increased + 13% (other overseas markets, Europe, South Asia, Japan, Latin America revenue + 25% / + 25% / + 10% / + 58%).The overseas business continued to grow rapidly in Q1 2019, of which GEA’s USD revenue increased by 10% and at the same time completed the delivery of the Italian Candy. The company’s strategic layout of the European market was implemented, and further transformation and development were promoted. Intensified competition, dragged down overseas, the company’s gross profit margin has declined.In 2018, domestic demand weakened, high raw material prices combined with increased price competition, and profitability declined.The company’s gross profit margin in 2018 was 29.00%, twice -2.00PCT.Regionally, overseas gross margin is 24.96% -3 per year.99PCT, domestic gross profit margin is 31.54% every year -0.82PCT.At the same time, gross profit margins of air conditioning, refrigerators, washing machines, kitchen appliances, water heaters, equipment parts, and integrated channel services fell by 0 in 2018.11, 1.68, 6.84, 2.29, 2.48, 7.58,1.86PCT.The sales expense ratio reached 15 in 2018.63%, twice -2.12%.Company management and R & D expenses 7.31%, ten years +0.32PCT. Continue to accelerate the internationalization strategy. The increase in the proportion of overseas revenue with nominal growth reaching the expected overseas revenue may affect the overall gross profit level. We expect the company’s EPS to be 1 in 2019-2021.38, 1.62, 1.87 yuan (average 1 before 2019-2020).43,1.65 yuan), the average PE of comparable companies in 2019 is 13.83x, the company’s global operations improve the overall operating efficiency and profitability level, reaching the depth of overseas markets and the balanced advantages of the local market. Overseas brands, products and Haier’s main brands effectively complement each other.Interval, corresponding to a reasonable price of 17.94?20.70 yuan, maintain “Buy” rating. Risk Warning: Reduced overseas demand; blocked development of the domestic market; increased competition in the industry.