Vantage Holdings (002035): Market demand is not strong enough, but gross profit margin does not change.

Vantage Holdings (002035): Market demand is not strong enough, but gross profit margin does not change.

1H19 results are in line with our expected 1H19 results: revenue 29.

3 ‰, the ten-year average of 7.

7%; net profit attributable to mother 3.

95 ppm, an increase of 15 in ten years.

3%, in 合肥夜网 line with our expectations.

Corresponding to 2Q19 income 16.

0 million yuan, a ten-year average of 8.

6%; net profit attributable to mother 2.

63 ppm, an increase of 15 in ten years.


The kitchen appliance and water heater industries are highly correlated with post real estate demand and are currently in a recession cycle.

AVC counts 1H19 kitchen appliances and retail sales of water heaters for six years.

9%, -7.


Although the company is facing pressure to reduce revenue and revenue, its gross profit margin and profit margin increase to maintain profitability growth.

1H19 financial analysis: 1) The gross profit margin was extended and increased 3.

4ppt to 49.

9%, mainly benefited from the decline in raw material costs and the expected growth rate reduction in the second quarter.

2) Due to the decrease in revenue, the expense ratio increased during the period2.


The company strengthened research and development, and the research and development expenditure increased by 17% each year, and the research and development expenditure rate increased to 3.


3) Operating profit increases by 6% annually.

Taking into account the reduction in income tax rates, the company’s net profit margin attributable to the parent increased to 2.

7ppt to 13.


1H19 revenue analysis: 1) The revenue from engineering channels decreased by 45% annually to 89.62 million yuan, mainly due to the impact of the timing of revenue recognition.

Revenue from e-commerce channels grows 4% to 8 per year.

3 billion, a growth rate.

2) The impact of kitchen appliances and water heaters continued to be subdivided by the impact of the real estate sales cycle. The company’s range hoods, stoves, and water heaters were separated by -6.

8%, -10.

8%, -14.


3) Among the company’s new categories, dishwasher, steaming and baking integrated machine, electric oven and other kitchen and electric supporting products total 1.

50,000 yuan, a year-on-year increase of 108%, but the current proportion of income is still relatively low (5%).

Development trend The real estate completion data in the first half of the year is still increasing, and there is no peak in house delivery as expected by the market.

But from January to July 2019, the floor space of new houses started to grow by more than 9%.

5%, if 4Q19 can form a peak for real estate delivery, we expect the industry’s growth rate to improve in 2020. Earnings Forecasts and Estimates We maintain our 2019 / 20e EPS forecast at 0.

88 yuan / 1.

05 yuan.

We maintain our Outperform rating, but as the company’s revenue increases, the growth rate is lower than our expectations, we lower our target price by 10.

0% to 13.

80 yuan corresponds to 15.

7 times 2019 P / E ratio and 13.

2 times the 2020 P / E ratio, 33 compared with the same period last year.

7% upside.

It currently corresponds to November 2019/2020.

7 times / 9.

9 times price-earnings ratio.

Risks Market demand for kitchen appliances reduces risks.