Core ideas:
The company released its mid-term report in 2019, showing steady growth.
Lily released the 2019 mid-term report. 2019H1 achieved an operating income of 1.01 billion yuan, an increase of 12.78% over the same period last year, and a net profit of 114 million yuan belonging to the shareholders of the parent company, an increase of 29.33% over the same period last year. In a single quarter, 2019Q2 achieved operating income of 551 million yuan, an increase of 8.25% over the same period last year and 20.04% month-on-month growth. The net profit attributed to shareholders of the parent company was 76 million yuan, an increase of 49.02% over the same period last year, and an increase of 105.41% over the previous quarter. Q2 net profit of the company was the highest since listing.
The prices of the main products rose compared with the same period last year, and the costs of major raw materials were mixed.
The announcement of the company's main operating data shows that the average selling price of the company's main products 19H1 (excluding tax) has increased to varying degrees compared with the same period last year, including 61419 yuan / ton for Yonggu yellow series, up 17.40% over the same period last year, 27491 yuan / ton for Lisuohong 57:1 series, up 2.14% over the same period last year, and 83770 yuan / ton for Yongguhong series, up 20.42% over the same period last year. At the same time, the average purchase price of major raw materials 19H1 (excluding tax) was mixed, while the purchase price of ethyl naphthol, 3pyr3 dichlorobenzidine fell by 3.88% and 19.71% respectively, and the purchase price of chromatol AS-IRG rose by 6.98% and 2.95%, respectively. Overall, the company's 19H1 gross profit margin is 24.47%, which is 1.74% higher than the same period last year. The gross profit margin of 19Q2 is 28.74% higher than the same period last year, the year-on-year increase in 5.65pct, the month-on-month improvement of 9.41pct, and the profitability have been enhanced.
The production capacity of fund-raising projects is released in an orderly manner, the layout of the industrial chain continues to advance, and the growth of the company can be expected.
Fund-raising projects: according to the report, the company invested in fund-raising projects during the reporting period-an annual output of 8000 tons of high-performance and environment-friendly organic pigments of 20.43 million yuan, with a cumulative investment of 172.78 million yuan. Industrial chain layout: in 2018, the company acquired 55% of Foward's equity and cut into the field of pearlescent pigments. According to the report, Foward 19H1 achieved a net profit of 9.0824 million yuan; Foward plans to invest in pearlescent new material production projects in Xiantao City, Hubei Province, to expand pearlescent pigment production capacity; in addition, the company plans to cooperate with Yinchuan Sodium Plant to invest in the construction of 20,000 tons of metal sodium project, which is one of the important raw materials of high-performance organic pigments.
Profit forecast and investment suggestion
We estimate that the company's earnings per share from 2019 to 2021 will be 1.11,1.40,1.62yuan respectively, with a price-to-earnings ratio of 19,15,13 times. Taking into account the company's leading position in the organic pigment industry and the company's growth, the average PE_TTM of the listed company in the pigment and dye industry is 23 times, and the company's 2019 earnings per share is valued at 23 times PE, corresponding to the company's reasonable value of 25.62yuan per share. Maintain the "overweight" rating.
Risk hint
The price of organic pigment products fell, the price of raw materials fluctuated sharply; downstream demand remained depressed; the progress of projects under construction was lower than expected; major safety and environmental accidents.