Event: the company issued a performance notice, and during the reporting period, the company achieved a total operating income of 2.056 billion yuan, an increase of 5.49% over the previous year, and a net profit of 101 million yuan belonging to shareholders of listed companies, down 2.07% from the previous year.
The main business is stable and the vacuum aluminized paper faucet is stable.
During the reporting period, the company actively responded to the structural adjustment of the cigarette industry. The traditional packaging business represented by the cigarette label was relatively stable, and its revenue increased steadily. As one of the earliest domestic enterprises engaged in vacuum aluminized paper business, the company participates in the formulation of industry standards for vacuum aluminized paper and leads the industry in the number of patents. In the face of the regional characteristics of cigarette sales, the company arranges through acquisitions and mergers. At present, the production base basically covers the main domestic middle and high-end cigarette production enterprises, covering 8 major domestic sales areas.
The layout of the e-cigarette business is in the lead, and the smoking set and the cigarette bomb take a two-pronged approach.
As early as 2013, the company set up Shanghai Luxin Electronic Technology Co., Ltd., a joint venture with Dongfeng Co., Ltd., engaged in the R & D and manufacture of e-cigarettes. In 2017, the company launched IQOS-compatible smoking sets to enter the Japanese market. In November 2018, the company's Hong Kong Green Xinfeng acquired Cambodian cigarette manufacturers for US $701800 to promote the development, production and sales of new non-burning tobacco products with heated content. We believe that the company is one of the few domestic companies that have a clear layout of heating non-burning cigarette sets and smoke bombs at the same time, and has successfully launched products and taken the lead in listing overseas, and is expected to maintain a leading position in the booming new tobacco industry.
Obtain the license to grow industrial marijuana and join hands with Yunnan Hansu to develop electronic biological health products.
In January 2019, the wholly-owned subsidiary of the company received the "Yunnan Industrial Hemp planting license" and obtained the planting qualification of Industrial Hemp Yunma No. 7, with a trial planting area of 1000 mu in the first phase, and received the approval of the application for the project of processing hemp mosaic. In February 2019, the company's subsidiary Shanghai Luxin signed a Cooperation Agreement with Yunnan Hansu and Hanma Group to jointly explore the market opportunities of industrial hemp mosaic and leaf extraction basic materials in electronic biological health products. Shanghai Luxin and Yunnan Hansu plan to jointly invest in setting up a new company to promote the coordinated development of Shunhao's e-cigarette and industrial marijuana-related business. We believe that industrial hemp is widely used in paper, textile, functional health food, medicine and other industries, and it is a new industry that has sprung up in recent years. Yunnan Hansu has China's first hemp processing license in line with GMP standards and has rich experience in the industry. the cooperation between the two sides will help to give full play to their respective advantages in the field of industrial hemp and e-cigarettes, and promote the development and production of electronic biological health products as well as the expansion of sales channels in the future. It is expected to bring new performance growth points for the company.
Profit forecast and investment suggestion
We estimate that in 2018-20, the revenue of the company will be 2.2952582 million yuan, the net profit will be 1.04 pound 1.32 billion, and the EPS will be 0.15, 0.19, 0.23 respectively. Consider the company's leading performance in the new tobacco, develop the electronic biological health business, and maintain the "overweight" rating.
Risk hint: the entry into force of the Cooperation Agreement depends on whether the joint venture company can obtain the approval of the public security anti-drug department on the research, production and sale of industrial cannabis electronic cigarette terminal products. Whether the joint venture company can obtain the approval documents approved by the public security department for the procurement of industrial hemp leaf base materials leads to a certain degree of uncertainty in its follow-up operation, and the specific implementation progress and effect are uncertain. Industrial marijuana should be strictly distinguished from intermediate marijuana and recreational marijuana / drugs, the risks of uncertainty and management should be regulated by national policies, and the legalization of recreational marijuana should be resolutely opposed.