ORIENTAL YUHONG WATERPROOF(002271):REVENUE WEAK BUT CASH FLOW IMPROVED;LARGE SHARE BUYBACK SHOWS CONFIDENCE
ORIENTAL YUHONG WATERPROOF(002271):REVENUE WEAK BUT CASH FLOW IMPROVED;LARGE SHARE BUYBACK SHOWS CONFIDENCE
1) Revenue fell; distribution channels remained stable. Due to tight market demand and lack of funds, the firm's revenue fell quickly in 1-3Q24 (-14% YoY; revenue fell 24% YoY in 3Q24). Specifically, revenue from engineering projects rose about 6% YoY to Rmb10bn, that from retail channels grew 2% YoY to Rmb7.8bn, and that from the direct sales channels declined more than 50% YoY. In 1-3Q24, the proportion of engineering projects and the retail segment also increased to 46% and 36% from 37% and 30% in the same period last year. In 3Q24, we estimate that revenue from the retail segment fell 8% YoY, revenue from engineering projects remained largely flat YoY, and that from direct sales channels and centralized procurement fell about 70% YoY.3Q24 results miss our expectation
第3季度24業績結果未達到我們的預期
Oriental Yuhong Waterproof announced its 3Q24 results: In 1-3Q24, revenue fell 14% YoY to Rmb21.7bn, and net profit attributable to shareholders fell 46% YoY to Rmb1.28bn. In 3Q24, revenue fell 24% YoY to Rmb6.48bn and net profit fell 67% YoY to Rmb334mn, missing our and market expectations, mainly due to lower revenue and heavier-than- expected pressure on expenses.
東易日盛水泥宣佈其第3季度24業績：截至1-3季度24，營業收入同比下降14% 到人民幣217億，淨利潤歸屬於股東同比下降46% 到人民幣12.8億。 第3季度24，營業收入同比下降24% 到人民幣64.8億，淨利潤同比下降67% 到人民幣3.34億，未達到我們和市場的預期，主要是由於收入減少以及費用壓力超出預期。
Rising revenue pressure; expenses under pressure; sharp decline in profit margin.
收入壓力上升；費用承壓；利潤率急劇下降。
1) Revenue fell; distribution channels remained stable. Due to tight market demand and lack of funds, the firm's revenue fell quickly in 1-3Q24 (-14% YoY; revenue fell 24% YoY in 3Q24). Specifically, revenue from engineering projects rose about 6% YoY to Rmb10bn, that from retail channels grew 2% YoY to Rmb7.8bn, and that from the direct sales channels declined more than 50% YoY. In 1-3Q24, the proportion of engineering projects and the retail segment also increased to 46% and 36% from 37% and 30% in the same period last year. In 3Q24, we estimate that revenue from the retail segment fell 8% YoY, revenue from engineering projects remained largely flat YoY, and that from direct sales channels and centralized procurement fell about 70% YoY.
1) 營收下滑；分銷渠道保持穩定。由於市場需求緊縮和資金不足，公司的營收在1-3季度24年快速下滑（同比下降14%；第3季度24年營收下降24%）。具體來說，工程項目收入同比增長約6% 到人民幣100億，零售渠道收入同比增長2% 到人民幣78億，直銷渠道收入同比下降超過50%。在1-3季度24中，工程項目和零售部門的比例也從去年同期的37% 和30% 上升到46% 和36%。在第3季度24中，我們估計來自零售部門的收入同比下降8%，工程項目收入基本持平，來自直銷渠道和集中採購的收入同比下降約70%。
2) Solid gross margin. Despite fierce competition and price wars YTD, the firm maintained solid gross margin thanks to its rising exposure to distribution channels. In 3Q24, gross margin rose 0.1ppt QoQ to 28.9% (- 0.5ppt YoY).
2) 堅實的毛利率。儘管今年以來競爭激烈且價格戰持續，由於公司對分銷渠道的持續暴露，公司保持了堅實的毛利率。 第3季度24，毛利率環比上升0.1個百分點 到28.9%（- 0.5個百分點 同比）。
3) Expense ratio rose sharply and net margin came under pressure. In 3Q24, the expense ratio rose 3.8ppt YoY to 18.5%, with selling expenses up 5% YoY, pushing its expense ratio up 3ppt and net margin down 6.8ppt YoY to 5.2%.
3) 費用率大幅上升，淨利率承壓。第3季度24，費用率同比上升3.8個百分點 到18.5%，銷售費用同比增長5%，使其費用率上升3個百分點，淨利率同比下降6.8個百分點 到5.2%。
Operational quality improving. 1) Turnover days remained largely stable: In 3Q24, accounts receivable turnover days fell 12 days YoY to 126 days, inventory turnover days rose 5 days YoY to 75 days, and accounts payable turnover days dropped 3 days YoY to 59 days. 2) Cash flow continued to improve: In 1-3Q24, the cash-to-revenue ratio rose 4.8ppt YoY to 100%, and in 3Q24, the ratio rose 18ppt YoY to 115%, pushing operating cash flow up Rmb4.27bn YoY to -Rmb492mn in 1-3Q24.
運營質量改善。1) 週轉天數基本保持穩定：第3季度24，應收賬款週轉天數同比降低12天 到126天，存貨週轉天數同比上升5天 到75天，應付賬款週轉天數同比下降3天 到59天。 2) 現金流繼續改善：在1-3季度24，現金收入比率同比上升4.8個百分點 到100%，在第3季度24，該比率同比上升18個百分點 到115%，推動經營現金流同比增加42.7億 到-4.92億元。
Operating cash flow increased Rmb1.65bn YoY to Rmb835mn in 3Q24. 3) Debt-to-asset ratio rose 2.7ppt QoQ to 44.1% in 3Q24, implying a net gearing ratio of 10.4%.
營業現金流在第三季度24年同比增加16.5億元人民幣，達到8.35億元人民幣。債務資產比率在第三季度24年環比上升2.7個百分點，達到44.1%，暗示淨負債率爲10.4%。
Trends to watch
需要注意的趨勢
Focusing on cash flow; awaiting stabilization of demand. Looking ahead, we believe the firm will continue to improve its cash flow by expanding distribution channels and strengthening payment collection amid weakening demand, boding well for its growth when the sector recovers. Meanwhile, the firm announced that it plans to use Rmb500- 1,000mn to buy back shares, proving its ample cash flow.
專注於現金流；等待需求穩定。展望未來，我們相信公司將通過拓展分銷渠道和加強收款來改善現金流，在需求疲軟時爲其增長奠定良好基礎，等行業板塊復甦時將受益。同時，公司宣佈計劃用5-10億元人民幣進行股票回購，證明其充足的現金流。
Financials and valuation
財務和估值。
We maintain our 2024 and 2025 net profit forecasts. The stock is trading at 19x and 14x 2024e and 2025e P/E. Given improving risk appetite and the firm's position as an industry leader, we maintain OUTPERFORM and raise our target price 28% to Rmb16, implying 21x and 16x 2024e and 2025e P/E, offering 14% upside.
我們維持對2024年和2025年淨利潤的預測。該股票的市盈率分別爲2024年預期和2025年預期的19倍和14倍。考慮到風險偏好改善以及公司作爲行業領導者的地位，我們維持OUTPERFORM評級並將目標價上調28%至16元人民幣，隱含2024年預期和2025年預期市盈率分別爲21倍和16倍，提供14%的上漲空間。
Risks
風險
Demand recovery disappoints; competition intensifies; raw material prices fluctuate.
需求恢復令人失望；競爭日益激烈；原材料價格波動。
譯文內容由第三人軟體翻譯。
