Chint solar charging and discharging controller appliances ( 601877). Three quarterly review: profit margins continue to improve the low pressure increase light industry customers

Key points of investment

revenue with added 17. , mother to net profit increased 6% 2. Deduct 7%, 19 q1-18 years affected by plant sale 3 net profit growth of 20. 5%. Company issued three quarterly reports in 2019, during the reporting period to achieve the business income is 224. 7. 7 billion yuan, rose 17. 62%; Implement belong to the parent company net profit 28. 6. 4 billion yuan, rose 2. 65%, corresponding to the EPS is 1. 33 yuan, excluding 18 years to sell power plants affect the 19 net profit growth of 20. 5%. Income profit growth of slightly more than expected as a whole.

gross margin from sustained recovery. 2019 q1 - 3 the company gross margin to 29. A slight drop in 41%, compared to 0. 4 PCT, Q3 gross margin 31. 7%, up from 1. 2 4 PCT, significant monthly rise. 7 PCT, the gross profit margin on continuous improvement mainly in low voltage electrical section in gross margin improvement and power station operation of ascension.

19 q1 - 3 low voltage division revenue growth is estimated at around 11%, which the Q3 is slightly higher than that of Q2, gross margin recovery, big customer orders in the second half of industry concentration. Among them, 1) Distribution market is still the company's traditional strength, look from the parent company caliber Q3 quarterly revenue 35. 400 million, flat, compared to the Q1 / Q2 - 4. 5% / - 3. Improved 3%, suggesting that the distribution market growth picked up; 2) Industry customers and terminal customers are key, in the first half of the orders increased 170%, part of the focus in the second half of the year, has embodied in Q3 report, China solar energy network, subsequent electric power, communication, real estate and industrial control industry big customer still has great room for growth; 3) Overseas adhere to the 'global localization' strategy, more than 20% of the country's whole year is expected to maintain growth. Low voltage margin slightly compared to the recovery, mainly by raw material prices, product structure adjustment, automatic authors, etc.

with pv operating income increased by 14%, solar energy, households with a large number of grid; EPC and overseas business accumulated a large number of advance payments, Q4 continue increase. 1) Business side: Q3 plant scale 3 at the end of the rights and interests. 17 gigawatts (gw), growth in the year 960 mw or so, mainly from families, households with annual installed capacity above 1 gw, Q1 - 3 in 17 + concentration realizes charge income. 900 million, photovoltaic (pv) grid, + 14% year-on-year; 2) EPC observed from the balance sheet, Q3 advance payments by the end of Q2 8. 6. 9 billion sharply increased to 15. 0. 3 billion and part of the deposit from the EPC project, it shows that in hand orders, inventory, is also increased, from solar panels, shows that construction project will affirm income steadily. 3) Component side expansion has 19 h 2 gw, shipments for the whole year is expected to more than 4 gigawatts (gw), solar power grid, is expected to maintain high growth. Rating:

the profit forecast and investment is expected to 2019 - 2021 female net profit of 39 respectively. 16/45. 08/51. 6. 9 billion, 9. 0% / 15. 1% / 14. 7%; EPS 1 respectively. 82/2. 10/2. 12 times 40 yuan, respectively corresponding to the present price PE / 10 times / 9 times, 16 to 2019 times PE, target price is $29, maintaining a 'buy' rating.

risk tip: macroeconomic persistent downward, policy change and increased competition