Racing Wheel Tire (601058) Interim Review: The downward elasticity of tire price increase highlights H1 net profit increased by 60%

Racing Wheel Tire (601058) Interim Review: The downward elasticity of tire price increase highlights H1 net profit increased by 60%
Event: The company released a semi-annual report, and the company’s revenue in 2019H1 was 70.92 ppm, a ten-year increase of 8.03%; achieve net profit attributable to mother 5.07 million yuan, an increase of 59 in ten years.34%; net cash flow from operations13.140,000 yuan, an increase of 198 in ten years.59%. Increased prices of overseas leading companies have led to rising tire prices: 2019H1 companies achieved scale net profit of 5.07 billion, an annual growth of 59.34%.The unexpected growth in performance has mainly broken through two aspects: 1) the increase in the sales price of tires; 2) the continuous decline in raw material prices has led to unexpected growth in performance. The rise in sales prices was driven more by price increases from overseas leaders.According to public information, from December 1, 2018, all brands, products and services of Michelin commercial vehicle tires have increased their prices by 8%; from January 1, 2019, Michelin, Bailuchi, and Uniroyal brandsCar tires and light truck tires increased by 5%, while in the US and Canadian markets, two-wheel tires will also increase by 5%.The increase in prices of overseas giants has directly driven the upward trend of tire prices. From a price perspective, the company’s 杭州桑拿 19H1 tire sales were 1888.320,000 pieces, the average selling price of a single piece is 336.84 yuan, an annual increase of 13.79%. The elasticity of the performance of raw materials prices in the downward growth, the logic of volume increase still exists, and the logic of price increases still needs to be confirmed.The company’s operating cost for 19H1 was 55.19 ppm, a 10-year increase3.11%, consistent with sales growth (3.89%). In terms of refinement, natural rubber / synthetic rubber / steel cord / carbon black 19Q1, which is the main raw material for tire production, increased by -6 respectively.66 / -0.52 / -4.13 / -14.27%; 19Q2 increased by 7.66 / -4.61 / -6.26 / -4.56%, the continuous decline in raw materials contributed to the tire gross profit margin improvement, the gross profit margin of the company in 19H122.18%,北京夜网 an increase of 3 per year.71% (18 in the same period last year.47%).In addition, the company ‘s 2.4 million-per-year all-steel tire project in Vietnam, co-operated with Cooper, started construction in 19Q2. It is expected that the project will be put into operation in 20 H1. We judge that the future volume increase logic remains, and the continued price increase logic remains to be seen. Profit forecast: It is estimated that the company’s net profit attributable to its mother in 19-21 will be 10.57/11.10/12.04 ppm corresponds to PE of 10/9/9 times, and the first coverage gives a “Buy” rating. Risk warning: the price of raw materials such as natural rubber rises