The company released its three-quarter report for 2020, with operating income of 2.23 billion yuan during the reporting period, down 4.05% from the same period last year; net profit of 230 million yuan, up 1.50% from the same period last year; net profit of 194 million yuan, down 2.16% from the same period last year; and basic earnings per share of 0.62 yuan per share.
Comments:
Q3 revenue performance is basically in line with expectations, capacity expansion increment can be expected. The company's single Q3 realized operating income of 913 million yuan, an increase of 8.48% over the same period last year (Q2-0.64%), and Q3 revenue stopped falling and became regular; the net profit from home was 102 million yuan, an increase of 21.01% over the same period last year (Q2 + 11.12%), and the profit growth rate rebounded, and the revenue performance was basically in line with expectations. After the epidemic gradually subsided, the export growth rate warmed up, and the endogenous business gradually recovered. at the same time, the assembled construction policy is good for the development prospect of the integrated sanitary ware business, and the epidemic situation gradually fades and gradually releases the potential of the household assembly industry in the future. The company continues to enrich the product matrix and expand production capacity, the production capacity is committed to equipment mechanization and automation research, ceramic brick production capacity is gradually expanded, Chongqing plans the first phase of the project to produce 800000 pieces of intelligent bathroom products sanitary ceramic production line project is gradually promoted, after the completion of the automatic production line capacity will be further released, reduce production costs, the future income is expected to restore healthy growth.
The profit level is growing steadily and the cash flow trend is improving. 2020Q1-Q3 's gross profit margin increased by 0.51pct to 33.43% year-on-year, net profit increased by 0.56pct to 10.32%, and net profit bill Q3 increased by 1.15pcts to 11.1%.
In terms of expense rate, the sales rate increased by 0.74pct to 9.84% over the same period last year. The management fee increased by 0.97pct to 6.46% compared with the same period last year, the financial fee increased by 0.10pct to 0.63%, and the R & D expense rate increased by 0.47pct to 4.20% compared with the same period last year. The company strengthens investment and R & D in ceramics and intelligent toilet technology, promotes automation and intelligent production technology, and predicts that the company's future profitability may continue to increase under the advantages of R & D and technology. In terms of cash flow, the net operating cash flow of the company's 2020Q1-Q3 was 514 million yuan, an increase of 254.17% over the same period last year, mainly due to the increase in the cash collection of notes receivable and the decrease in the settlement and payment of notes payable, and the company's long-term trend of adequate paper liquidity.
Focus on research and development to create intelligent bathroom brand, channel expansion can be expected in the future. The company continues to invest in and develop intelligent bathroom products, covering the full range of bathroom, to create intelligent bathroom brand, it is expected that technology and products will continue to be in a leading position in the industry. On the channel side, during the epidemic, the company actively promotes the development of new retail, optimizes and adjusts offline stores, carries out online retail business, and realizes three-dimensional network layout; at the same time, it actively promotes the international market by making use of existing customers and online resources. It is expected that in the future, with the continuous enrichment of product categories, the improvement of production efficiency by automated production, and the continuous expansion of online and foreign markets, the company's performance is expected to return to healthy growth. We continue to be optimistic about the company's domestic channel construction and capacity expansion, and the export side is actively engaged in international market development.
We maintain the company's profit forecast and estimate that the return net profit from 2020 to 2022 is 3.73,4.21 and 463 million yuan respectively, and the EPS is 1.01,1.14,1.25 yuan per share respectively, corresponding to the current market capitalization PE of 11,10 and 9 times respectively. Taking into account the rapid recovery of the company's engineering channels and the overall sanitary ware development prospects, we maintain the company's target price of 20 yuan per share, corresponding to 20 times PE in 2020, maintaining a "strong push" rating.
Risk hint: the real estate market is not as expected, and exchange rate fluctuations lead to sharp fluctuations in profits.