Event
2019 Annual report: in 2019, the company achieved revenue of 1.98 billion yuan, an increase of 9.3% over the same period last year; a net profit of 227 million yuan, an increase of 20% over the same period last year; a net profit of 211 million yuan, an increase of 28% over the same period last year; and a weighted average ROE of 15.2%, an increase of 1.0% over the same period last year.
Brief comment
Continuous optimization of product quality and sustained high growth in performance
The company's performance increased significantly compared with the same period last year, mainly due to: ① continues to strengthen innovation, constantly improve and optimize product quality; ② increases the extension of the upper reaches of the industrial chain, the competitive advantage of the company's products is further enhanced, and profitability is improved. According to the statement, ① 's revenue scale expanded, its gross profit margin increased slightly, and its gross profit increased by 99 million yuan; expenses, taxes and additions during the ② period increased by 31 million yuan; ③ impairment losses and income decreased by 5 million yuan; and ④ income tax increased by 13 million yuan. In total, the above-mentioned net profit increased by 51 million yuan, which is basically in line with the actual increase of 38 million yuan. During the reporting period, the company incurred sales expenses of 43 million yuan, an increase of 33% over the same period last year, and the expense rate of 2.15%, mainly due to the increase in personnel, wages and market promotion fees; the management expenses were 90 million yuan, an increase of 15% over the same period last year, and the expense rate was 4.55%. If it is caused by the increase in welfare and business expenses.
In a single quarter, Q4 achieved revenue of 494 million yuan, an increase of 8.2% over the same period last year, an increase of 3.7% over the same period last year, a net profit of 52 million yuan, an increase of 36% over the same period last year, a decline of 14% over the previous quarter, and a net profit of 49 million yuan after deducting it, an increase of 45% over the same period last year and down 16% from the previous year. In terms of cash flow, the company achieved a net cash flow of 184 million yuan in operating activities during the reporting period, a substantial increase of 74% over the same period last year, and the current net ratio and current income ratio reached 72% and 64% respectively.
Projects under construction increased by 35% compared with the same period last year, mainly due to the increase in investment and construction by companies.
Fund-raising projects bring increments, and sales of major products continue to grow.
The company focuses on the R & D, production, sales and service of organic pigments and intermediates. By the end of the reporting period, the company has more than 50 pigment production lines and more than 20 intermediate production lines. High-performance organic pigments and some intermediates are in the leading position in the domestic market share.
The production capacity of the company's investment project of 5000 tons of environment-friendly organic pigments has been fully released, and the subsidiary Xuancheng pigment annual output of 5000 tons of organic pigment products optimization and upgrading project has been completed.
According to the update of product technology, the company has adjusted and optimized some of the processes of 3000 tons of high-performance organic pigment project, which is expected to be put into production in June 2020.
The landing of the above projects will further increase the company's pigment market share. During the reporting period, the company's total organic pigment production reached 37300 tons. In 2019, the company achieved pigment production of 33304 tons, down 3.5% from the same period last year; pigment sales reached 33600 tons, an increase of 2.0% over the same period last year.
The strict environmental protection promotes the price rise of some intermediates, and the product price transmission is relatively smooth. in recent years, environmental protection supervision has become stricter, resulting in a continuous rise in the price of some upstream intermediates of pigments, and the response price transmission of the company's products is smooth. During the reporting period, the prices of the company's main products basically rose across the board: the 19-year average price of Yongguhuang series was 63576 yuan / ton, an increase of 15.2% over the same period last year; the 19-year average price of Lisol red series was 27728 yuan / ton, an increase of 1.1% over the same period last year; the 19-year average price of permanent red series was 85949 yuan / ton, an increase of 18.0% over the same period last year; and the 19-year average price of Sedian red series was 33187 yuan / ton, down 1.5% from the same period last year. The average price of quinacridone series was 180505 yuan per ton in 19 years, an increase of 0.86% over the same period last year. The overall transmission from the intermediate to the pigment price is relatively smooth, so that the company's gross profit margin can be effectively improved. During the reporting period, the company achieved a gross profit margin of 26.00%, an increase of 3.07 pct over the same period last year, and a net profit margin of 12.93%, an increase of 1.11pct over the same period last year.
The Xuancheng pigment transformation project has been completed, and the fund-raising project has brought future increments. During the reporting period, the company's production capacity of 5000 tons of environment-friendly organic pigments has been completely released, and the subsidiary Xuancheng pigment annual output of 5000 tons of organic pigment products optimization and upgrading project has been completed. In addition, part of the process of the 3000-ton high-performance organic pigment project has been adjusted and optimized and is expected to be put into production in June 2010. the company's pigment production and sales can continue to grow.
We are concerned about the improvement of industry concentration brought about by environmental protection and safety factors, and are optimistic that the company's leading scale effect organic pigment products have the attribute of rigid demand. at present, the compound annual growth rate of domestic consumption is maintained at 3% and 5%. With the continuous strengthening of domestic environmental protection control, organic pigment enterprises with high energy consumption and high pollution will continue to withdraw, and standardized leading enterprises are expected to benefit significantly under the background of increased industry concentration. In addition, the recent documents about the closure of chemical parks in Jiangsu Province have also brought certain catalytic factors. At present, the concentration of the pigment industry is still low. At present, there are about 10 enterprises with an output of more than 10,000 tons of organic pigments, and about 30 enterprises with an output of between 10,000 tons and 10,000 tons. The company's existing production capacity ranks second in the industry. With the catalysis brought by environmental protection, safety and other factors, the integration of the pigment industry is under way, and the company's leading scale advantage will be gradually reflected after the further improvement of industry concentration.
It is estimated that the company's net profit in 2020 and 2021 will be 2.93 yuan and 357 million yuan respectively, corresponding to PE 26 and 21X.