Zoomlion (000157): Stock repurchase reflects long-term confidence and is formulated as an employee incentive plan to improve the incentive system

Zoomlion (000157): Stock repurchase reflects long-term confidence and is formulated as an employee incentive plan to improve the incentive system

Recent situation of the company On May 12, the company announced that it intends to use its own funds to repurchase the company’s A shares through concentrated bidding.

5%, not more than 5% of the total share capital, and the repurchase price does not exceed RMB 7.

63 yuan / share, the share repurchase is intended to be used for employee stock ownership plans.

We believe that from the perspective of the company’s balance sheet and operating cash flow, it is also fully capable of conducting repurchases of this size.

Commenting on share repurchases reflects long-term confidence in the value of the company.

The company intends to repurchase A shares not less than the current total share capital of 2.

5%, not more than 5% of the total share capital, the corresponding number of shares repurchased is 1.

95-3.

9 billion shares.

According to the repo price ceiling 7.

At 63 yuan / share, the repurchase budget is 14.

9-29.

800 million.

The acquisition and repurchase of this issue reflects the company’s confidence in long-term value, and at the same time it is conducive to enhancing investor confidence and promote the company to gradually match its internal value.

The repurchased shares are intended to be used for employee stock ownership plans, binding on the long-term interests of employees and the company.

The company’s stock repurchase plan will be completed within the next 12 months. After the stock repurchase is completed, the company intends to use the repurchase stock for employee stock ownership plans.

The share repurchase shares issued this time are intended for employees to hold shares, which will help the company to further bind the long-term interests of employees, the company and shareholders.

Market share continued to increase.

In the first quarter of 19, the company sold 3,429 truck cranes, an annual increase of 81.

4%, market share is 27.

6%, an increase of 1 per year.

7ppt.

The demand for tower cranes continues to boom. We expect that the large and medium towers suitable for prefabricated buildings are expected to continue high growth. In 2019, the company’s tower crane sales growth rate is expected to exceed 60%, and the market share will further increase.

We expect the company’s pump truck sales growth rate to reach 30% -40% in 2019. The proportion of pump trucks to concrete 南京夜生活网 machinery revenue will continue to increase, and the growth rate of concrete machinery revenue will pick up quarter by quarter.

Profitability is expected to improve.

The company’s comprehensive gross profit margin for the first quarter of 19 was 30.

0%, an increase of 4 per year.

7ppt, gross margin level has reached the industry-leading level.

During the first quarter of 19, the company’s expense ratio decreased by 1.

3ppt, net sales margin is 11.

1%, an increase of 5 per year.

2ppt.

We expect that with the optimization of the company’s product structure and the release of scale effects, profitability is expected to continue to increase.

Estimates suggest that considering the company’s profitability is expected to continue to improve, we raise our 2019 / 20e profit forecast10.

5% / 8.

1% to 0.

48/0.

56 yuan.The company’s current A-share sustainable correspondence for 2019 / 20e P / E is 9.

9x / 8.

5x, H shares sustainable correspondence 2019 / 20e P / E is 8.

0x / 6.

9x.

Maintain recommended level and A / H share target price of 6.

RMB 10/5.

HK $ 79.

The target price of A shares corresponds to 13/11 times P / E in 19/20, and the target price of H shares corresponds to 11/9 times P / E in 19/20, corresponding to 23% / 28% upside currently.

Risks Lower-than-expected investment in downstream fixed assets.