Op Lighting (603515): Going further through the cycle of the lighting industry

Op Lighting (603515): Going further through the cycle of the lighting industry

The results for the first quarter of 2018 and 19 were in line with the expected 2018 operating income of 80.

0 million yuan, an increase of 15 in ten years.

0%; net profit attributable to parent company 8.

9.9 billion, a year-on-year increase of 32.

0%.

Corresponds to 4Q18 operating income 24.

200 million, up 13 in ten years.

3%; net profit attributable to parent company3.

29 ppm, an increase of 24 in ten years.

0%.

Dividends for 2018 are 0.

4 yuan / share, the dividend rate is 33.

63%.

Operating income for the first quarter of 19 16.

600 million, up 12 in ten years.

2%; net profit attributable to parent company is 0.

86 ‰, rising 22 per year.

8%.

Financial analysis in 2018: 1) Gross profit margin has decreased year by year 4.

1ppt, mainly due to online sales price competition and the increase in the proportion of commercial lighting.

Gross profit margin was low in 4Q18 and rebounded in 1Q19.

2) Government subsidies 1.

0 million yuan, because the equity investment increased by 67.69 million yuan.

However, most government subsidies are based on company earnings, and large subsidies are still expected in 2019.

3) R & D expenses 3.

200 million, accounting for 4% of revenue.

0%, ten years +43.

5%, the growth is significantly higher than income growth.

4) Cash in hand (monetary 四川耍耍网 funds + wealth management) 4 billion US dollars, ten years + 10%.

Business analysis: 1) Commercial lighting is growing rapidly, especially overseas revenue6.

0 million yuan, an increase of 39 in ten years.

9%.

2) The light source business has grown steadily, and the online cost-effective sales strategy has seized market share.

3) The growth trend of home lighting is mainly due to the adverse impact of the decoration market demand on the post-real estate cycle.

4) Benefiting from the expansion of categories, continued to enrich the categories of art switches, plugs and other plug-ins, the electrical business grew steadily.

In 2018, the company set up the electrical converter business unit, and the company’s internal merger was promoted.

5) Intelligent lighting products (including intelligent control modules) account for over 20%.

The development trend is affected by the real estate post-cycle. It is expected that the growth rate of home lighting business will gradually improve starting from the second half of the year.The company’s future key strategy: enhance the brand image and build a smart lighting ecosystem.

Earnings forecast remains EPS forecast for 2019/201.

39/1.

71 yuan.

Estimates and recommendations maintain recommended levels.

After considering the improvement of the real estate post-cycle industry evaluation, the target price is raised by 7% to 44.

50 yuan, corresponding to 32x / 26x 2019 / 20e P / E, compared with the current breakthrough breakthrough space of 24%.

The company currently corresponds to 26x / 21x 2019 / 20e P / E.

Risk Market competition risks. The risk of home lighting being affected by fluctuations in real estate sales.