The company released the third quarterly report of 2019, achieving high growth in performance.
In the first three quarters of 2019, the company achieved revenue of 5.902 billion yuan, an increase of 6.61% over the same period last year, a net profit of 618 million yuan, an increase of 87.36% over the same period last year, and a net profit of 508 million yuan, an increase of 92.21% over the same period last year. Of this total, Q3 achieved a revenue of 2.019 billion yuan in a single quarter, up 8.76% from the same period last year, and a net profit of 241 million yuan, an increase of 87.60% over the same period last year.
The company expense rate has been improved.
In terms of expense rate, the company recorded 345 million yuan in sales expenses, 5.85% in revenue, 1.63 0.20PCT lower than the same period last year; 175 million yuan in management expenses, 2.96% in revenue, 0.43 PCT lower than the same period last year; 131 million yuan in R & D expenses, 2.22% in revenue, 0.05 PCT higher than the same period last year; 7 million yuan in financial expenses, 0.11% in revenue, lower PCT than the same period last year. The total expense rate is 11.14% lower than last year's 13.35% 2.21PCT, which is mainly due to the company's higher sales revenue and lower advertising expenses.
A marked increase in profit margin
The gross profit margin in the first three quarters was 22.12%, an increase in 1.29PCT compared with 20.83% last year. Among them, Q3 achieved a gross profit margin of 25.37% in the single quarter, an increase in 4.56PCT compared with 20.81% last year. Taking into account the obvious improvement in the expense rate, the net interest rate reached 10.47% in the first three quarters, an increase of 4.51PCT over the same period last year, of which Q3 achieved a net interest rate of 11.96% in the single quarter, an increase of 5.03PCT over the same period last year.
The increase in sales volume is obvious, and the profit margin is enlarged.
According to the company's operating data for the third quarter, the company sold 14.7782 million tires in the first three quarters, an increase of 20.59% over the same period last year, of which Q3 sold 5.3122 million units in the third quarter, up 24.45% from the same period last year. The average price of a single child in the third quarter was 378.78 yuan, down 6.8% from the previous month and 12.55% from the same period last year. We judge that the change in the price of a single child is mainly caused by the structure of tire products.
According to the company's operating data, the average price of tire products (in terms of quality) increased by 0.29% month-on-month in the third quarter, down 5.00% from the same period last year. Taking into account the decline in the purchase price of major raw materials over the same period last year, including an increase of 0.13% in the purchase price of natural rubber, 19.23% in synthetic rubber, 19.18% in carbon black and 3.68% in steel cord, we estimate that the company's overall raw materials are down about 9% from the same period last year. The company's price spread widened and gross profit margin increased.
Investment advice:
We estimate that the company's 2019-21 return net profit is 8.22,9.52 and 1.088 billion yuan respectively, EPS is 1.03,1.19 and 1.36 yuan per share, corresponding to PE is 13,11 and 10 times, given a "recommended" rating.
Risk tips: natural rubber diseases in Southeast Asia, project production is not up to expectations, sales growth is not up to expectations.