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新澳股份(603889):Q2净利受汇兑影响 毛条环比扭亏

New Australia shares (603889): Q2 net profit was affected by exchange, and gross bars reversed losses month-on-month

華西證券 ·  Aug 21

Incident Overview

24H1 Company's annual revenue/net profit attributable to mothers/ net profit after deduction of non-attributable net profit/net operating cash flow were 25.56/0.266/0.26/0.063 billion yuan respectively, up 10.14%/4.52%/5.77%/corrected year on year. The lower cash flow from operating activities than net profit was mainly due to an increase in accounts receivable. 24Q2's revenue/net profit attributable to mothers/net profit deducted from non-mother was 14.57/1.70/1.66 yuan, up 8.44%/3.38%/5.43% year over year. The 24Q2 net profit growth rate was lower than revenue mainly due to increased financial expenses, that is, 23Q2 had exchange earnings, which affected 19 million yuan.

Analytical judgment:

Both wool and cashmere increased in price and fell. (1) In terms of products, 24H1 worsted wool/cashmere/wool strip/modified treatment, dyeing and cashmere processing/other revenue was 14.79/6.77/0.361/0.022/0.017 billion yuan respectively, up 10.01%/19.65%/-5.32%/44.67%/21.37% over the previous year. Looking at the split price, 24H1 worsted yarn/cashmere achieved sales volume of 9285/1029 tons, an increase of 13%/39% year on year. The unit price was 0.1593/0.6581 million/ton respectively, down 2.93%/13.96% year on year. Our analysis was mainly affected by the decline in wool prices in the first half of the year. (2) By region, 2024H1's domestic/export revenue was 1.672/0.884 billion yuan, an increase of 9.45%/11.48% year-on-year, and overseas market demand gradually recovered. (3) Looking at subsidiary companies: Xinzheng (wool) /Houyuan Textile (dyed and finished) /Xinao Cashmere/Duncan/Taiyuan Textile in the UK earned 8.85/1.54/0.533/0.16/0.178 billion yuan respectively, up -4.77%/14.69%/25.21%/-0.15%/-43.96% over the previous year.

The gross margin of worsted spinning increased further, the net interest rate of dyeing and finishing increased, the net interest rate of cashmere declined, and the loss was reversed month-on-month. The decline in net interest rate in Q2 was mainly affected by the financial expense ratio. 1) 24H1 gross margin was 20.62%, up 0.51 PCT year on year. By product, wool-worsted yarn/cashmere/wool strip/modified treatment, dyeing and cashmere processing/other gross margins were 27.09%/14.21%/5.45%/30.83%/54.27%, respectively, up 1.40/-2.06/-0.30/1.24/-2.67PCT. We analyzed that the increase in gross margin of worsted yarn was mainly due to improved capacity utilization. (2) The 24H1 net interest rate/deducted non-net interest rate was 10.41%/10.17%, down 0.56/0.42PCT. Judging from expenses, the 24H1 sales/management/development/finance expenses ratio was 1.68%/2.69%/2.33%/0.97%, and the year-on-year increase was -0.06/0.04/-0.02/1.68PCT. The increase in financial expense ratio was mainly due to increased exchange losses due to increased interest on bank loans and exchange rate changes; the increase in the management fee ratio was mainly due to increased share payment fees. The share of net income from other income and investment increased by 0.42 PCT year on year; the share of asset and credit impairment losses decreased by 0.35 PCT year on year; and the share of income tax decreased by 0.02 PCT. (3) Looking at the net profit of subsidiary companies, the net interest rate of Houyuan Textiles increased, and Xinzhonghe (wool strip) /Houyuan Textile (dyed and finished) /Xinao Cashmere/Duncan/Taiyuan Textile's net profit was 1596.34/3592.86/33.5531/2.5846/0.1747 million yuan respectively, up -4.45%/23.61%/-16.63%/-75.71%/-97.34%, respectively, with net interest rates of 1.8%/23.34%/6.30%/1.62% 0.10%, up 0.01/1.69/ -3.16/ -5.03/-1.97PCT year-on-year. (4) 24Q2 gross margin/net profit margin was 21.55%/11.68%, up 0.43/-0.57PCT year on year. The total cost ratio for the period increased by 1.85PCT (of which the financial expense ratio increased by 1.94PCT); the share of tax and additional income increased by 0.16 PCT; the share of net income from changes in fair value decreased by 0.24PCT; the share of net income from changes in fair value decreased by 0.24 PCT; the share of asset and credit impairment losses decreased by 0.07 PCT.

Inventory and inventory turnover days declined. 24H1 inventory was $1.825 billion, down 3.28% year on year; inventory turnover days were 164 days, down 13 days year on year; accounts receivable were 0.742 billion yuan, up 9.18% year on year, and accounts receivable turnover days was 41 days, the same as the same period; accounts payable was $0.576 billion, up 13.71% year on year, and accounts payable turnover was 40 days, up 4 days year on year.

Investment advice

According to our analysis, (1) According to the company's announcement, the new production capacity next year mainly comes from 15,000 spindles of wool worsted yarn in the second phase (starting production); the first phase of 0.02 million spindles of the subsidiary New Australia and Vietnam “50,000 spindles of high-grade worsted eco-yarn textile dyeing and finishing project” is expected to be completed by the end of this year and put into operation one after another; the subsidiary's “20,000 spindles of high-quality worsted wool (velvet) yarn construction project” in Yinchuan, New Australia is scheduled to be put into operation in the second half of 2025. (2) The utilization rate of cashmere production capacity continues to improve, but there is still room for improvement in quality and efficiency; (3) In the long run, the company will continue to implement a broadband strategy, expanding yarn categories horizontally, and on the other hand, expanding customers to sports, outdoor, woven, home textiles, industrial textiles, etc.; compared with domestic and foreign competitors, the company is ahead of its rivals in terms of equipment, and is expected to continue to seize share in the future. Maintaining the 24/25/26 revenue forecast of 5.11/5.8/6.57 billion yuan; maintaining the 24/25/26 net profit forecast of 0.477/0.541/0.656 billion yuan, corresponding to the 24/25/26 EPS forecast of 0.65/0.74/0.90 yuan, and the closing price of 6.41 yuan on August 20, 2024 corresponding PE was 10/9/7 times, respectively, maintaining the “buy” rating.

Risk warning

Risk that wool profit recovery falls short of expectations, risk of cashmere gross margin increase falling short of expectations, risk of fluctuating raw material prices, and systemic risk.

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