This report is read as follows:
The company continued to adjust its business structure in the first three quarters, with a slowdown in revenue, a decline in net profit, improved profitability and controllable expenses as a whole. In the future, the company will stabilize its revenue and maintain a cautious increase in its rating after the adjustment is in place. no, no, no.
Continue to strengthen the business of medical protective clothing and maintain prudent investment points for increasing ratings:
Maintain cautious overrating: in the third quarter, the company continued to adjust and optimize its business structure, and Q3 revenue fluctuated, taking into account the impact of the epidemic on the company's civilian and military products sales business, maintaining an EPS of 0.01 EPS for 2020-2022, with reference to comparable peers, giving the company 0.87 times PB in 2021 and lowering the target price to 3.56 yuan.
The company adjusted its business structure and Q3 revenue declined. The company's revenue in the first three quarters of 2020 was 10.179 billion yuan, down 32.12% from the same period last year, mainly due to the reduction of the scale of the company's low gross profit margin business; the net profit was 31.81 million yuan, down 38.34% from the same period last year, and the performance was in line with expectations. The company continues to adjust the business structure, significantly reduce the scale of trade business, clothing printing and dyeing and other business scale has declined.
In the future, the company will further focus on the main footwear industry, and it is expected that the performance will stabilize and pick up after the adjustment is in place.
The company reduces the low gross profit margin business to improve the gross profit margin, and the expense rate is basically stable. The company adjusted its product structure, reduced the business scale of trade, textile printing and dyeing, professional shoes and protective equipment, and increased its gross profit margin by 3.64pct to 12.51% in the first three quarters. The rate of sales expenses and management expenses slightly increased 0.36pct and 1.99pct to 2.82% and 6.77% respectively, and remained basically stable in the later period of the epidemic.
The company actively explores business transformation and upgrading, and is expected to improve in the future after the adjustment is in place. Under the influence of COVID-19 's epidemic situation, the traditional business of Jihua Group is under pressure, and the company has shifted its focus to producing epidemic prevention materials such as medical protective clothing to supply markets at home and abroad, so as to obtain new growth points. At the same time, Jihua Group is actively exploring transformation and upgrading, laying out the Jihua Garden project, positioning itself as a provider of commercial services, sports and leisure experience and holiday services in the suburbs of the city. It is expected that as the company increases its R & D investment and completes the business restructuring of military and civilian products, the company's performance is expected to stabilize growth in the future.
Risk hint: the recovery after the epidemic is not as expected, and the business adjustment is lower than expected.
