Top Group (601689): Tesla’s domestic performance improved quarter-on-quarter, releases new growth

Top Group (601689): Tesla’s domestic performance improved quarter-on-quarter, releases new growth

This report reads: The company’s third-quarter performance growth decline has narrowed. Through the marginal improvement of passenger vehicle sales in the fourth quarter and Tesla Shanghai’s commissioning to drive new product growth, the company’s performance is expected to gradually improve.

Investment Highlights: Maintain “Overweight” rating.

Company Q3 achieved revenue of 13.

2.8 billion (-3.

9%), net profit attributable to mother 1.

27 ppm (-30%), performance exceeded expectations.

Affected by the risk of reduced sales of the passenger car industry in 2019, the company’s revenue and profit decreased in the third quarter, which was a slight improvement from the previous quarter.

It is expected that the trend of industry sales growth in the fourth quarter of each year will improve marginally, and the company will fully benefit from Tesla’s localization, and the company’s performance is expected to help restore improvement.

Affected by the sluggish sales of passenger cars in 2019 (Q1-10 in the first three quarters of 2019).

3%), we cut the company 2019?
EPS to 0 in 2021.



76 yuan (formerly 0.



98 yuan), refer to the company’s historical PE interval (15?
30 times), combined with the current PE of the Tesla industry chain (44 times), give Top Group a certain estimated 杭州桑拿网 premium, and give the company 24 times PE in 2020, corresponding to a target price of 14.

88 yuan (original 14.

4 yuan).

The increase in production capacity in the third quarter led to a quarter-on-quarter increase in profitability.

The company’s Q3 gross profit / net margin was 26 respectively.

37% / 9.

85%, compared with 25 in the second quarter.

76% / 8.

20% increase slightly, we think the reason is that the company’s main downstream customers Geely, SAIC, Changan and other third-quarter production and sales growth, driving the company’s product supporting volume increase, thereby improving production efficiency, profitability improved.

Tesla localization releases new growth drivers.

Recently, the Tesla Shanghai factory has entered the trial production stage, and Top has entered the Tesla 南京夜网 supply system. The products supplied include shock absorption, subframe, chassis structure and interior decoration.For the capacity planning of the Shanghai plant, the first phase of 250,000 Wanda will generate about 1.2 billion revenues for Topla.

Catalyst: Tesla speeds up production and sales.

Risk warning: the forecast of the macroeconomic growth rate, the sales volume of the passenger car industry continues to decline.