Desai Xiwei (002920): The performance of the intelligent driving business has been steadily promoted by the downturn

Brief evaluation of performance The company announced its semi-annual report for 2019 and realized revenue in 2019H1.

7.1 billion, 1.

2 billion, 0.

46 trillion, each year -20.

6%, -64.

4%, -82.

4%.

The EPS is 0.

19 yuan.

Operating analysis was affected by the downturn in the auto market, and performance was under pressure.

(1) The company steadily ranks among the leading players with screens in the center, has a proven background in German technology, solid technology, and high customer recognition. It ranks first in traditional car market share, and is deeply tied to the TOP3 joint venture car factory.

However, as the downturn in the auto market dragged down the main business with screen control, the overall performance of 2019H1 was under pressure, revenue continued to drop 21%, and net profit attributable to mothers fell 64%, in line with expectations.

(2) Product prices are under pressure, and the annual downward pressure is high, and the overall gross profit margin has decreased by 3 compared with the same period last year.

8 points to 22.

1%, the second half of the year is expected to improve with the rebound of the auto market boom.

(3) The sales / management / R & D / financial expense ratios are 3 respectively.

3% 北京桑拿洗浴保健 / 3.

4% / 13.

0% / 0.

2%, compared with 13.
.

8% up 6.

1pct.

Among them, through continuous investment in research and development in the field of intelligent driving, the cost of research and development has been greatly increased to 300 million US dollars, accounting for 13 of the turnover.

8%, an increase of 30 per year.

5%.

(4) Net cash flow from operating activities decreased by 79% year-on-year to 1.

10,000 yuan.

The intelligent driving business has blossomed in many points, and it is estimated to have support.

Intelligent driving continued customer development: Successfully obtained Toyota’s platform-based new project designation and mass production in 2020; broke through white spot customers such as Changan Ford and DAF cars; strategic cooperation with FAW Group;Sign a strategic cooperation agreement and increase cooperation in the intelligent driving business segment.

Smart Cockpit: Release 3.

Version 0, the first four-screen interactive smart driving product based on Qualcomm Snapdragon 820A, will be mass-produced on the ideal ONE model.

Intelligent driving: High-definition surround view system has been mass-produced on multiple projects, and orders have been rapidly increased; automatic parking systems have been mass-produced; T-Box products have been mass-produced to support multiple international and independent brand models; V2X products have been awarded international brand car factory projectsTargeted for mass production in 2020.

Telematics: won FAW-Volkswagen, Chery Jaguar Land Rover, Changan Mazda Telematics platform, OTA, scenario intelligence and other projects.

Earnings adjustment and investment recommendations Due to the continued downturn in the auto market, the 2019 profit forecast is lowered by 45%.

It is expected that the company’s net profit for 2019-2021 will be 2 respectively.

21/3.

35/3.
900,000 yuan, the corresponding EPS is 0.
40/0.

61/0.

71 yuan.

Due to the company’s self-driving business support estimates, the target price is reduced by 31% to 20.

10 yuan, corresponding to 50x PE in 2019, maintain overweight rating.

Risk warnings indicate that the growth rate of supporting car companies; customer development is less than expected; the development of the autonomous driving and connected car industry is less than expected; product costs have fallen below expectations.