In the three major business lines of Wanxiang Qianchao (000559), the revenues of the transmission system, chassis system and bearing system increased by 21%, 38%, and 23% in the first three quarters respectively. However, the price rises in raw materials and the price drop in OEMs were doubled. Under pressure, gross margins have fallen. As the company plays a role in controlling the cost rate during the period, profits have increased.
The pressure on the company’s export business is increasing. In the first half of the year, the company’s products sold to Wanxiang Import and Export Company reached 390 million yuan, accounting for 23.07% of the main business revenue, slightly lower than the level of the previous year. Considering the future development of export business, on the one hand, in the international market, the market share of the company’s leading products such as universal joints is already high, while the average growth rate of the international automobile industry is limited. On the other hand, with the export tax rebate policy The expectation of reform and appreciation of the renminbi not only reduces the competitiveness of the company's products in the international market, but also contributes to the profitability. From the perspective of the company’s major shareholders continuing to increase their shareholdings in the secondary market by more than 100 million shares, major shareholders are more concerned with the orientation of Wanxiang Qianchao in the group, and also imply that the future may be treated as universal money tides. Integrate Wanxiang Group's auto parts business and even auto manufacturing business platform. However, this kind of integration is not yet clear and is being considered cautiously. It is not expected to inject assets.
Song Bing, an analyst at CITIC, expects the company's EPS to be 0.15 yuan, 0.18 yuan and 0.22 yuan in the next three years. The current price-to-earnings ratio is 21 times (2007), and the target price is 3.50 yuan, giving a "neutral" rating.
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