Main points of investment
Event: Zhangzi Island announced its 2017 semi-annual report that the company achieved sales revenue of 1.505 billion yuan, up 12.60% from the same period last year, and its net profit was 30.77 million yuan, up 360.16% from the same period last year. After deducting 31.89 million yuan, the net profit increased 229.25% from the same period last year. The company expects Q3 to return home net profit of 7500-85 million yuan in 2017, up 135.61% from the same period last year.
Marine pastures have recovered well, the supply of sea treasures has risen steadily, and downstream sales channels have been continuously expanded. The overall prosperity of aquatic products rebounded slightly in the first half of this year, and the company has strengthened the research and control of marine eco-environmental risks in recent years. Marine pastures have recovered well, and the supply of sea treasures has increased steadily. (1) in the first half of the year, the volume and price of shrimp and Japanese scallop business of the aquaculture end company rose together, the supply of live products increased steadily, and the downstream sales accurately matched the main sales areas such as Beijing, Shanghai and Guangzhou, achieving sales income of 441 million yuan, up 20.81% over the same period last year; the effect of cultivating sea cucumber resources was prominent, and channel construction was gradually enhanced, achieving sales revenue of 86.67 million yuan, up 10.90% over the same period last year; and abalone sales income of 8.65 million yuan, a sharp increase of 275.15% over the same period last year. (2) the synergy effect of the company's mode of combination of aquatic processing and trade is good. The orders of various processing enterprises in the supply chain platform are sufficient. The sales income of the aquatic products processing industry is 474 million yuan, up 15.30% from the same period last year. The sales income of the aquatic products trade industry is 583 million yuan, up 19.14% from the same period last year. Among them, snack food companies carry out in-depth strategic cooperation with good food shops. At present, there are more than 4000 snack monopoly terminals. Nearly 20 new categories of aquatic snack food have been added.
The company's expense rate decreased significantly, while the gross profit margin and net profit margin increased compared with the same period last year. The company achieved a net profit of 30.77 million yuan in the first half of 17 years, a sharp increase of 360.16% over the same period last year. The gross profit margin of sales was 17.45%, up 1.74% from the same period last year, and the net profit margin of sales was 1.97%, up 1.50% from the same period last year. The company's operation and management improved significantly, and the expense rate decreased steadily, of which sales expenses were 80 million yuan, accounting for 5.32% of operating income, down 0.82% from the same period last year; management expenses were 68 million yuan, accounting for 4.55% of operating income, down 2.19% from the same period last year; financial expenses were 74 million yuan, accounting for 4.89% of operating income, up 0.21% from the same period last year. The company's non-operating income was 2.71 million yuan, down 92.68% from the same period last year, mainly due to the decrease in wind index insurance claims income.
The development and release of the food side of the company will be accelerated, and the performance is expected to increase steadily in the next two years. Relying on the unique marine pasture resources, the company actively develops downstream food R & D and sales channels, and transforms from food materials enterprises to food enterprises. (1) the Food Research and Development Company set up the Marine Food Innovation Research Institute, which developed 30 new products in the first half of the year, of which 15 new products, such as abalone and clam series, were successfully listed, providing the company with a large amount of R & D reserves. (2) the food sales end company continuously enhances the brand influence by making use of the omni-channel advantages and marketing functions such as specialty stores, snack food, circulation and e-commerce, and carries out in-depth strategic cooperation with retail channels such as good products. The continuous deepening of brand strength and channel power will help to continuously increase the company's sales performance.
2017 is the first year after the recovery of the company's marine ranch and its performance turned from loss to profit. In the long run, whether it is the return to profitability of the original business or the extension breakthrough of the downstream food side, it is worth looking forward to. It is recommended that we continue to pay attention to the bottom reversal. We estimate that the net profit of the company in 2017 and 2018 will be 2.06 yuan and 305 million yuan, respectively, and the EPS will be 0.29 yuan and 0.43 yuan respectively. We will give the 2018 30XPE with a target price of 12.9 yuan, maintaining the "overweight" rating.
Risk hints: the fluctuation risk of aquatic product prices; the uncertainty of marine natural conditions.
