Sinotruk’s 1H19net profit increased 3.1% yoy to RMB2,493million,better than our expectation. Revenue was flat in 1H19, as sales volume forHDT and LDT decreased by 0.9% yoy and 5.0% yoy, respectively. However,ASP increased yoy by 4.8% and 9.8% for HDT and LDT, respectively. Thatalso translates to better gross margin in the first half, up 1.4ppts yoy to19.5%. Both selling expense and administrative expense were also wellcontrolled. However, R&D expense soared 24.5% yoy and the increasedeffective tax rate dragged net margin, which was only up by 0.1ppts to 7.2%.
We have increased our profit forecasts by 3.6%/ 3.9%/ 2.9% in 2019to2021, respectively. We have reduced sales assumptions for both HDT andLDT as the Company was behind industry average. However, we have liftedgross margin assumptions as ASP in 1H19indicates sales mix improvement.
We maintain our investment rating as "Accumulate" but revise down TPto HK$12.60, which represents 7.9x 2019PER and 7.5x 2020PER, 1.2x2019PBR and 1.1x 2020PBR. Despite slight increase in shareholders’ profitforecast, our TP represents a lower valuation as we think the unstableeconomic environment and below-average truck sales continue to suppressvaluation. Nonetheless, the current valuation is attractive and given theCompany’s strong background in both products and management restructureeffort, we believe it’s an opportunity to accumulate at the current price point.
我们将2019年至2021年的盈利预测分别上调3.6%/ 3.9%/ 2.9%。我们降低了重卡和轻卡的销售假设,因为公司落后于行业平均水平。然而,我们提高了毛利率假设,因为2019年上半年的平均售价表明销售组合有所改善。