Main points of investment
The company announced that the operating income in 2015 was 291 million yuan, down 5.23% from the same period last year; the net profit belonging to the parent company was 37 million yuan, down 24.23% from the same period last year, and the non-net profit decreased by 17.95% compared with the same period last year.
In 2016, the company's Q1 achieved operating income of 55 million yuan, a year-on-year growth rate of-32.79%. The net profit belonging to the parent company was 9 million yuan, a year-on-year growth rate of-26.11%. Non-net profit decreased by 32.77% year-on-year.
The gross profit margin fell 1.8% year-on-year, and the expense rate increased by 0.6% year-on-year. Under the influence of low-cost gadget gift products, daily porcelain gross profit margin fell 1.3pct to 30.8% compared with the same period last year, and the change in product structure is the main factor affecting the decline in gross profit margin. In 2015, the company's expense rate was 15.1%, an increase of 0.6pct over the same period last year, of which the sales expense rate increased by 1.1pct to 5.6% due to the company's increased investment in advertising and exhibition development, while the management expense rate increased by 2.4pct to 11.1% due to declining revenue and rigid labor costs.
Actively embrace "Internet +" and cultivate new driving forces for performance growth. It is mentioned in the company's development strategy that the company will not only deepen the main business and further consolidate and improve the brand market share, but also actively open up new business areas, try to form new profit growth points, and provide shareholders with better investment returns. The company's "Songfa win Fund", set up with its own capital of 800 million yuan, is committed to equity mergers and acquisitions in emerging industries such as "Internet +". As the company continues to accumulate experience in industrial investment, the potential excellent investment target is expected to become a new driving force for performance growth.
Maintain the "overweight" rating: the domestic ceramic industry is expected to benefit from the increasingly obvious consumption upgrading. As an industry leader, the company strengthens the development of the domestic market through the all-channel model of offline stores and the Internet. It is expected to enjoy the development brought about by the growth of the domestic market. In addition, the company's establishment of industrial fund marks a clear expectation of transformation, and the scale of Songfa Chuangwin Industrial Fund is large, which is expected to provide greater business support for the company's transformation; we estimate that the company's eps in 2016-2017 will be 0.55 yuan and 0.66 yuan respectively, and the corresponding PE will be 79x and 66X respectively.