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Zhongshun Jierou (002511) 2019 Interim Report Review: Profit Elasticity Falling

Zhongshun Jierou (002511) 2019 Interim Report Review: Profit Elasticity Falling

Zhongshun Jierou (002511) 2019 Interim Report Review: Profit Elasticity Falling

Investment Highlights: The company announced its 2019 Interim Report: The company achieved operating income from January to June 201931.

72 ppm, an increase of 22 in ten years.

7%; net profit attributable to mother 2.

75 ppm, an increase of 37 in ten years.

6%; deducted non-attributed net profit 2.

70 ppm, an increase of 42 in ten years.


Among them, the income in 2019Q2 was 16.

32 ppm, an increase of 19 years.

9%; net profit attributable to mother 1.

51 ppm, an increase of 49 in ten years.

7%; net profit after deduction 1

48 ppm, an increase of 50 in ten years.

1%; after deducting the impact of fair incentive expenses, the net profit of 杭州夜生活网 mother and mother increased by 70% in the second quarter, basically in line with expectations.

Net operating cash flow for the first half of 2019 was 7.

350,000 yuan, an increase of 341 in ten years.

3%, operating cash flow improved significantly.

The product power-driven performance has been steadily improved, channels have been sinking in an orderly and undistorted manner, and revenue has continued to grow steadily.

1) Product strength continues to manifest and the proportion of high-end products continues to increase: the company focuses on category extension and development, high-margin face, emulsion and natural wood consumer groups continue to increase stickiness, and revenue maintains high growth; more new categories are developed in the futureOpening up blank market space, such as the protection industry, is also a number of profitable sectors, which is expected to achieve newness through research and development and promotion, increasing revenue and profit-end burst points.

2) The company’s channels have been developing steadily, and the four major channels are working together: The company currently has about 2,700 dealers, and the management and development of dealers are smooth. The total number of dealers in 19 years is expected to maintain steady growth.

The company continued to intensify its investment in e-commerce platforms such as Tmall, Taobao, and JD. The e-commerce channels continued to grow rapidly.

The commercial marketing team has matured, and the commercial marketing channels have achieved rapid growth.

3) New production capacity to help expansion: The company’s 19-year estimated increase in production capacity exceeds 7 tons, with a total production capacity of more than 73 tons, which has been transformed into the deployment and application of new equipment, and the cumulative utilization has significantly improved in the earlier period.The new factory (Hubei 30 high-end residential paper project) has continuous battery production capacity. In the future, the new production capacity will be continuously landed and put into production. New sales areas will be gradually developed to ensure the company’s revenue scale and market share continue to increase.

The price of pulp has fallen, the incremental reduction and the adjustment of product structure have jointly promoted the increase in gross profit margin.

Single-quarter gross margin for the second quarter of 2019 was 39.

2% month-on-month, up 5 each year.

2 and 4

9 points.

1) Downward pulp price: The quotation of silver star for outer disk coniferous pulp was gradually reduced from US $ 760 / ton to US $ 580 / ton in July, down by 23.

7%; Quotation of the outer disk broadleaf pulp Silver Star was gradually reduced from US $ 680 / ton to US $ 520 / ton in July, down by 23.

5%, the company’s product prices are stable, benefit costs have fallen, and the company’s gross profit margin has increased.

However, as the drop in pulp prices has a lagging effect on costs, it is expected that the profit elasticity in the second half of the year will be more adequate.

2) Expected downward adjustment: Starting from April 1, the increase of the tax rate will be reduced, the company’s product tax-included price will be stable, and the upstream pulp-included tax-included quotation will be subsequently reduced.

3) Product structure adjustment. The company continued to launch high gross profit margin products, and the proportion of high gross profit margin products continued to increase, driving the gross profit margin upward.

Channels have continued to expand, product structure has been adjusted and upgraded, refined management has tapped profit potential, and the company’s fundamentals have continued to improve.

Under the full incentive mechanism of the company’s executives and employees, KA channel cooperation was widened, breakthrough progress was made on the online platform, channel construction blossomed, and revenue grew steadily.

The product structure was adjusted, the proportion of products with high gross profit margins increased, product upgrades were initiated, differentiated competition increased the stickiness of the customer base, and refined management ensured that profitability could continue to improve.

Due to the further decline in pulp prices, we have raised the company’s net profit attributable to mothers for 2019-2021 to 6.
100,000 yuan, 6.
9.8 billion yuan and 8.

00 100% (was 5).

22 trillion, 6.

2.1 billion and 7.

4 billion), currently sustainable (13.

(59 yuan) Corresponding to the PE of 2019-2021 is 29 times, 25 times and 22 times respectively. We are optimistic about Jierou’s growth logic in the industry for a long time. At the same time, we are optimistic about the establishment of the company’s brand value.