Report guide
The company released its third quarter report in 2019.
Main points of investment
Digesting channel inventory leads to a decline in performance
During the reporting period, the company realized operating income of 854 million yuan, down 16.39% from the same period last year, net profit of 174 million yuan, down 23.09% from the same period last year, and net profit of 156 million yuan, down 30.38% from the same period last year, achieving EPS0.35 yuan, down 45.31% from the same period last year. From a quarterly point of view, the operating income of Q3 company was 313 million yuan, down 14.68% from the same period last year, the net profit was 57 million yuan, down 30.84% from the same period last year, and the net profit after deducting non-return was 56 million yuan, down 32.45% from the same period last year. The main reason for the decline in performance is to reduce shipments in order to digest channel inventory, while more discount is used for shipments. Accounts receivable fell for the first time in two years to 1.472 billion yuan.
With the introduction of Shanxi State Investment, the problem of funds has been solved.
On July 30, 2019, Dongsheng Group, the company's controlling shareholder, signed a "Cooperation Framework Agreement" with Shanxi State Investment, introducing Shanxi State Investment as a strategic investor. on September 30, the company has transferred 40 million shares of the company (accounting for 8.13% of the total share capital) to Shanxi State Investment, the capital problem of major shareholders has been solved, and it is expected that the company's operation will return to the right track in the future.
Profit forecast and valuation
Due to capital problems affecting the company's business plan for 2019, we reduced the company's operating income from 2019 to 2021 to 1.97 billion yuan, 2.43 billion yuan and 3.031 billion yuan respectively, an increase of 21.73%, 23.31% and 24.74% respectively over the same period last year; the net profit attributed to the parent company was 371 million yuan, 478 million yuan and 614 million yuan respectively, with year-on-year increases of-0.96%, 28.88% and 28.62%, respectively The corresponding EPS is 1.05,1.35 and 1.74 yuan respectively, and the corresponding pre-PE is 15 times, 12 times and 9 times respectively, maintaining the "over-holding" rating.
Risk hint
The rate of sales expenses remains high.
Accounts receivable cannot be collected.
The follow-up cooperation with Shanxi State Investment Fund is not smooth.
