Yutong Bus (600066): The industry accelerates the pattern of clearing the market;

Company’s recent situation On January 11, the Ministry of Industry and Information Technology stated that in order to stabilize market expectations and ensure the healthy and sustainable development of the industry, this year’s new energy vehicle subsidy policy will remain relatively stable and will not significantly decline.

  Commentary The market share of leading companies continues to increase, and the logic of the industry’s accelerated clearance is gradually fulfilled.

In recent years, the sales volume of the traditional bus market has fallen, and the new energy bus market has come to an end, and it is forcing tail companies to accelerate their elimination.

1-11M19 pure electric bus CR5 reached 58.

4%, a significant increase of 6 compared to 2018.

2ppt.

As far as Yutong is concerned, 1-3Q19 has a market share of 38 meters in the large and medium-sized 四川耍耍网 customers.

1%, reaching the highest level in history, an increase of 3 compared with 2018.

6ppt, 1-11M19 in the new energy pure electric bus market share reached 25.

4%, an increase of 4.
.

8ppt.

Looking forward, we expect Yutong’s market share in the domestic traditional passenger car market will further increase, while its market share in the new energy passenger car market is gradually catching up with the level of traditional passenger cars.

  The improvement of the shape is favorable for the price increase, and the hedging part supplements the impact of the decline.

In the short term, the core variable of industry demand and profit is still the compensation for the decline.

However, for the company, the impact of the decline on profitability can be compensated by reducing costs and raising prices.

For the point of complete withdrawal of different supplements, we calculated the profit level of Yutong New Energy Bus.

  Taking 2019 as the profit base point, under the optimistic assumption, if the current level of replenishment continues to the end of this year, a bicycle price increase of -0 is required in 2020.

1 million can achieve a flat profit, which means that if we can increase prices through product upgrades, reduce procurement costs and other expenses, this year the company will fully enjoy the profit increase brought by price increases and cost reductions, and our net profit will gradually reach 25-30100 million (assuming that traditional bus profits are flat).

Under the pessimistic assumption, if the supplement is completely withdrawn in mid-2020, the bike price increase in 2020 will be 4.

20,000 yuan, 2017-2018 Yutong New Energy Terminals increased by 100,000 yuan and 70,000 yuan, respectively. Maintaining a flat profit is challenging, but with the improvement, it is easier to raise prices for leading companies, which is good for companies that are subsidizing the tax refundProfit margins are maintained.

  Estimates suggest that the current company is in line with the 12x PER corresponding to 2020.

Based on more optimistic expectations for supplementary policies, we raised our 2020 profit forecast by 6% to 27.

500 million, maintaining the profit forecast for 2019/2021 unchanged.

Maintain Outperform rating and raise target price by 6% to 19.

5 yuan, corresponding to 16 times the price-earnings ratio in 2020, compared with the current continuous upside of 35%.

  The sales of risky buses increased significantly; the industry’s clearance rate exceeded expectations.