Estun (002747): H1 performance is basically in line with expectations Acquires CLOOS and enters the first international echelon of robotics

Estun (002747): H1 performance is basically in line with expectations Acquires CLOOS and enters the first international echelon of robotics

Event 1: The company’s H1 revenue in 2019 was 6.

80,000 yuan, 6% at the beginning of the year;

57 trillion, ten years +0.

7%; deduct non-attributed net profit 0.

390,000 yuan, at least -16%.

Event 2: The company intends to increase investment with Dingpai Electromechanical Co., Ltd. with its controlling shareholder, Prest.

5.1 billion.

After the completion of Dingpai Electromechanical, the registered capital reached 700 million U.S. dollars, which was used to acquire 100% equity in Germany.

Estun owns 49% of 杭州桑拿 Dingpai Machinery, and shareholder Perest holds 51%.

Investment from overseas subsidiaries1.

9.6 billion euros acquired 100% of German Cloos.

Main points of investment The growth of the main business is affected by investment restrictions and the growth rate of the industrial robot itself is 10%. The revenue is mainly affected by the continuous economic growth.

53% of the revenue from automation core components and motion control systems3.

600 million (-3%); 47% of industrial robot and intelligent manufacturing system revenue3.

200 million (-9%).

The core components of automation and motion control system business segmentation are mainly due to insufficient demand in the industrial control market, but the revenue from motion control and AC servo business has maintained a relative growth.

The decline in revenue was mainly due to the lack of demand and increasing demand in the industrial control market, and the price reduction of the Taiwan-based AC servo brand.

However, the share of complete motion control solutions has increased rapidly, accounting for 51% of revenue in the transportation control segment.

7%.

The decline in business performance of industrial robots and intelligent manufacturing systems is the selective abandonment of some intelligent manufacturing system projects in the automotive industry with poor repayment conditions (income growth of -20%); to prevent capital occupation and prevent capital chain risks.

What deserves attention: 1) The company achieved an increase of about 10% in the revenue of the industrial robot itself, while domestic industrial robot sales in H1 increased by 10 in 2019.

8%.

The adverse growth of the company’s robot body business has benefited from the improvement of robot technology and performance, the growth of segmented industries and the effects of customized development.

2) In the first half of the year, the non-recurring profit of the company decreased by 16% because the non-recurring profit and loss of 2019H1 was zero.

180,000 yuan (+0.

08,000 yuan) (including government subsidies of 0.

1.6 billion).

The profitability is stable, the expense ratio rises during the period, and the cash flow improves the overall gross profit margin36.

88% (+0.

7pct), net interest rate 9.

5% (+0.

9pct), keep stable.

In terms of business, the gross profit margin of core automation components and motion control systems was 42% (+ 3pct); the gross profit margin of industrial robots and intelligent manufacturing systems was 31% (-2pct).

The company is in a period of rapid expansion. We believe that the synergistic effects of mergers and acquisitions, the increase in market share and the effects of large-scale production of core components, the gross profit margin of core components and robotics business will still increase in the second half.

The period expense ratio is 32% (+ 4pct), of which financial expenses are 3% (+0.

8pct), mainly because the interest income from wealth management is included in “investment income”.

Net operating cash flow was zero.

42 trillion, 2018H1 is -0.89 million, as of the end of 2018.

14 trillion, a significant improvement in cash flow; 2019H1 inventory is 3.

960,000 yuan (+0.

500 million), the inventory remained stable and increased slightly; the company’s goodwill stabilized at 4.

7-4.

800 million, an absolute increase.

The proposed acquisition of top welding robot companies, synergy effect to help enter the international echelon of robots Cloos is the world’s most prestigious robot welding field top companies.

The company has benefited significantly from synergies: 1) Cloos has high-quality customers and market share in the field of plate and plate welding automation. Mergers and acquisitions have become the company’s short board in the field of welding, and welding has always been the largest downstream application of robots.

2) Seize the market of thin and medium-end welding robot workstations, and simultaneously enter the robot laser welding and laser 3D printing markets.

3) The brand, technology, products, customers and sales channels of the Cloos robot will be acquired.

Earnings forecast and investment rating: Regardless of this acquisition, we estimate the company’s net profit for 2019-2021 will be 1.

3, 1.

5, 1.

800 million, corresponding to PE is 59, 50, 42 times, maintaining the “overweight” level.

Risk Warning: The business situation is less than expected, the industry competition is intensified, and market demand is less than expected