Gree Electric (000651) Quarterly Report Review: Industry Structure Stable, Revenue Increases Slightly

Gree Electric (000651) Quarterly Report Review: Industry Structure Stable, Revenue Increases Slightly

In the first quarter, the high-baseline growth indicator of revenue and earnings was in line with expectations. The company maintained its “Buy” rating on April 29, 2019. The company disclosed its first quarter report for 2019, and its total operating income for the first quarter of 2019 was 410.

0.6 million yuan, ten years +2.

45%, net profit to mother 56.

72 trillion, +1 a year.

62%, net profit after deduction is 51.

1.4 billion, +22 a year.


We expect the company’s EPS to be 5 in 2019-2021.

06, 5.

97, 7.

07 yuan, maintaining the company’s “Buy” rating.

It is expected that the external sales will be dragged down, and the domestic sales will maintain a high growth. The company’s total operating income in the first quarter of 2019 was 410.

0.6 million yuan, ten years +2.


Industry online data shows that from January to March 2019, the company’s air conditioning adjustment volume was 11.79 million units, +0 per year.

17%, of which 7.56 million units are sold domestically, +3 in ten years.

4%, we believe that the company’s internal sales market still maintains a competitive advantage, channel power, product power, and brand power can cover the moat, leading the industry in growth rate, and the internal sales share reached 34.

6% (decade +0.


The company exported 4.23 million units in ten years -5.

16%, the export performance is slightly weaker than the industry, with a market share of 23.

0% (one year-0.


Optimize employee compensation mechanism, cost, management and R & D expense ratio improvement The company has adjusted salary adjustments for employees since January 2019, optimized salary incentive mechanism, shortened the improvement of company cost, management and R & D expense ratio.

The company’s gross profit margin for Q1 2019 was 31.

37%, -0 per year.


2019Q1 company selling expenses 10.

17% every year -0.

70PCT, the “gross margin-sales expense ratio” is 21.

19%, ten years +0.


At the same time, we believe that the management and R & D expense ratio has increased due to the increase in employee compensation, of which the management expense ratio has reached 2.

16%, ten years +0.

18PCT, R & D expense ratio reaches 3.

01%, ten years +0.


Finance costs are -0.2.3 billion.

In Q1 2019, the company achieved net profit attributable to its mother56.

72 trillion, +1 a year.


Affected by non-recurring subjects, the company’s net profit after deducting non-recurring increases increased faster than the company’s 2019Q1 non-recurring profit and loss subjects total 5.

58 ppm, of which mainly government subsidies2.

2.8 billion yuan (mainly financial incentives, subsidies for technological transformation, subsidies for development projects, etc.), financial asset-related losses and benefits3.

350,000 yuan (mainly investment income, gains and losses from changes in fair value).

The total non-recurring profit and loss accounts of the company in 2018Q113.

96 million, in comparison, the non-recurring subjects in 2019Q1 have decreased, so the net profit after deduction for non-returning mothers in Q1 2019 is 51.

1.杭州桑拿4 billion, +22 a year.


The leader maintains its advantage and is optimistic about future growth. We predict that the company’s EPS for 2019-2021 will be 5.

06, 5.

97, 7.

07 yuan, the average PE of the reference industry in 2019 is 13.


Considering 1) the governance structure or improvement, the company is expected to accelerate the development of integration leader.

2) The dividend rate has recovered to nearly 50%, which is expected to further repair the company’s assessment.

3) MSCI’s increase in the A-share segmentation factor and foreign expectations of replacement have driven the company’s expectations.

4) Compared with the three major white power companies, Gree PE TTM estimates that it is expected to be restored to the 14-16X range in the future. If new shareholders in the future have significantly improved the company’s business synergy, the company’s size may be further increased.

Recognition given to the company 14 in 2019?
16xPE estimates, corresponding to a target price of 70.


96 yuan / share, maintain “Buy” rating.

Risk Warning: Foreign exchange inflow is lower than expected.

Macroeconomic downturn.

Land impact may exceed expectations.