Event: the company's annual operating income in 2019 was 3.257 billion yuan, an increase of 49.76% over the same period last year; the net profit of shareholders belonging to listed companies was 170 million yuan, an increase of 81.75% over the same period last year; and after deduction, the net profit of shareholders of listed companies was 144 million yuan, an increase of 116.49% over the same period last year, corresponding to EPS 0.2177 yuan. In the first quarter of 2020, the company achieved operating income of 335 million yuan, down 64.21% from the same period last year, and its net profit was 35 million yuan, down 6.64% from the same period last year.
The supply of sugar beet has increased, and the growth rate is expected to decline. The company's sugar business is concentrated in Xinjiang Luyuan sugar industry, with daily processing of 5000 tons of sugar beet, annual processing capacity of 50,000 tons, 2019 sugar business sales revenue of 289 million yuan, an increase of 30.9% over the same period last year. Since the second half of 1919, the output of beet sugar in China has increased slightly from 1.15 million tons / month to 1.32 million tons / month, while the supply has increased, the demand has basically remained unchanged, and the domestic sugar price has declined slightly. It is expected that the growth rate of the company's sugar business will slow down in 2020.
Tomato processing business picked up. In 2019, the company's operating income from tomato products increased by 16.2% to 678 million yuan, and the gross profit margin decreased by 4.2 percentage points to 20.58%. The increase in gross profit margin was due to the increase in labor costs and the increase in raw material purchase and production in the reporting period. At present, the tomato processing business has rebounded to the income scale of 2016.
Cotton business came under pressure in the first quarter. Due to the impact of the epidemic, city closures and delayed resumption of work across the country had a huge impact on the downstream demand for cotton products, orders at home and abroad or a substantial reduction, the company's cotton-related business sales revenue dropped more than the same period last year, consumer enthusiasm warmed up in the second quarter, cotton business may usher in an inflection point.
Profit forecast: we predict that the net profit attributed to the parent company from 2020 to 2022 is 209 million yuan, 235 million yuan and 254 million yuan respectively, and the corresponding EPS is 0.27,0.30,0.32 yuan respectively, and the current stock price is 19.1 times the corresponding PE. COVID-19 epidemic outbreak has a certain impact on the company's business, if downstream consumer enthusiasm warms up, it will help the company's stable performance in the second half of the year. The "prudent recommendation" rating is given for the first time.
Risk tips: the risk of the epidemic affecting product sales; the risk of declining prosperity of the industry; the systemic risk of capital market, and so on.