Operating income fell 5.2% year-on-year, and net profit dropped 24.2% year on year:
According to the company's 2015 annual report, revenue fell 5.2 per cent year-on-year to 290 million. In terms of products, revenue from household porcelain decreased by 3 per cent to 280 million, while fine porcelain and ceramic wine bottles fell by 48.4 per cent and 72.6 per cent respectively. From a regional point of view, domestic revenue reached 104 million, an increase of 46% over the same period last year, while overseas revenue fell 20.7% to 187 million.
The company's main source of income is daily porcelain, accounting for 96.3% of revenue. Although sales of daily porcelain increased by 29% in 2015 compared with the same period last year, shipments of daily porcelain are mainly small gifts, and the low unit price leads to weak revenue performance and declining profitability.
In 2015, the company achieved a net profit of 36.89 million, down 24.2% from the same period last year, equivalent to 0.42 yuan in EPS. The 2015 dividend plan is 0.95 yuan (including tax) for every 10 shares.
The gross profit margin fell 1.8% year-on-year, and the expense rate increased 0.6% year-on-year: in 2015, the company's gross profit margin was 31.3%, 1.8% lower than the same period last year. From a product point of view, daily porcelain gross profit margin fell 1.3% year-on-year to 30.8%. Fine porcelain gross profit margin increased 0.4% year-on-year, ceramic wine bottle gross profit margin decreased 15.2% year-on-year.
In 2015, the company's expense rate during the period was 15.1%, an increase of 0.6% over the same period last year, of which the sales expense rate increased by 1.1% to 5.6% due to the company's increased investment in advertising and exhibition development; the management expense rate increased by 2.4% to 11.1% due to declining revenue and rigid labor costs.
The main industry is expected to benefit from the upgrading of consumption, and industrial funds will help the transformation:
We believe that the threshold of the domestic domestic ceramic industry is low, the competition is incentive, and the industrial integration is quite difficult, but the increasingly obvious consumption upgrading helps to loose this excellent enterprise with the qualification of state banquet porcelain. The company's current strategy of vigorously opening up the domestic market is correct and timely, and we are optimistic about the development prospects of the company in the domestic domestic ceramic market in the future.
In August 2015, the company established Guangdong Songfa win-win Industrial M & A Fund in cooperation with Qianhai United win-win Investment Management Co., Ltd., with a scale of 800 million in the first phase, focusing on emerging industries. We believe that the transformation and upgrading of industrial funds to emerging areas is an important point for the company in the future.
Transformation and upgrade expectations + small market capitalization, given a "buy" rating:
We predict that the EPS of the company from 2016 to 2017 will be 0.48,0.55 yuan, and the current stock price will be 79 times and 69 times corresponding to PE. Given the company's expectation of extensive mergers and acquisitions in emerging areas and its current market capitalization of only 3.37 billion, it is given a "buy" rating.
Risk hint: the main business was dragged down by the weakness of the European economy and the transformation failed.