In the first three quarters of 2019, the company achieved revenue of 1.152 billion yuan (yoy+0.42%), net profit of 151 million yuan (yoy-16.05%), net profit of 155 million yuan (yoy-8.84%) and net operating cash inflow of 259 million yuan (yoy+56.53%). Of this total, Q3 revenue is 294 million yuan (yoy-5.47%, qoq- 40.82%) and net profit is 23 million yuan (yoy-58.34%,qoq-72.93%).
Strong sales of enoylmorpholine Climate and other external force majeure dragged down Q3 performance: during the reporting period, the company's main products realized revenue of 462 million yuan (yoy+4%), 162 million yuan (disclosed that the caliber adjustment lost comparability), 119 million yuan (yoy+70%), 124 million yuan (yoy-27%) and 61 million yuan (yoy+14%), respectively. The total contributed revenue of 928 million yuan accounted for 81% of the total revenue. The company's main products as a whole to achieve more stable growth. Q3 in a single quarter, thanks to the increase in the scale of production and sales, the company's enyl morpholine single-quarter revenue increased by 72% compared with the same period last year. In terms of product price, the average sales price of each product in Q3 quarter was 1.923 million yuan / ton (yoy+0.2% Qoq-6%), dioxin 848 thousand yuan / ton (qoq-23%), enoylmorpholine 14.35 million yuan / ton (yoy+15%, qoq-13%), imidacil 247600 yuan / ton (yoy+36%,qoq-12%), herbicide tobacco 223700 yuan / ton (yoy+14%,qoq-11%), the overall price remains relatively high, but affected by the off-season demand seasonally, the price has declined.
The company's Q3 gross profit margin decreased by 34.47% (yoy-4.09pct, qoq-1.49%). In the scale of expenses and expenses of the company Q3, due to the reduction of sales volume, the sales expenses decreased by 8.69 million yuan compared with Q2, and the scale of other expenses was basically the same as that of Q2, but due to the decline of income, the expense rate increased 9.3pct during the period. The company's quarterly net interest rate fell to 7.96%, which is at the bottom of the company in recent years. Affected by Typhoon Lekima, the company's Q3 production and operation were affected to a certain extent, but the company's own product production and marketing level still maintained a high level, external force majeure hindered the release of Q3 performance.
Huludao base opens the growth space of the company: the project of 6000 tons of crude drugs and 10,000 tons of preparations under construction in the first phase of Huludao is progressing in an orderly manner. According to the semi-annual report, the progress of the project is 76%. As of the end of Q3, the company is under construction of 417 million yuan, an increase of 98 million yuan over the end of Q2, and the construction is expected to come to an end. The company's investment in the first phase of Huludao is about 770 million yuan, and the payback period is 3.04 years. The higher return on investment means that the company may have a strong control over future products or have a greater comprehensive cost advantage in new production capacity. With the completion and commissioning of the first phase of the project, the second phase of the project is expected to relay, with the gradual release of new projects and new products, the problem of capacity constraints will be completely solved, and the company's long-term growth space is expected to open.
Profit forecast: in view of the adverse effects of the external environment, we adjust the company's 2019-2021 revenue forecast to 16.73,20.20 and 2.538 billion yuan, and return to the mother net profit forecast to 2.38,2.83 and 346 million yuan, corresponding to PE of 12X, 10X and 8X respectively, maintaining the "buy" rating.
Risk hint: product prices have fallen sharply; new projects are not progressing as expected