Huida Sanitary Ware (603385) Semi-annual Report Comment: Profitability Improved, Significant Performance and Fast Growth
Event: The company released its 2019 Interim Report and achieved operating income14.
8.2 billion, an increase of 6 compared with the same period last year.
97%; realized net profit attributable to the parent company is 1.
43 trillion, an increase of 20 compared with the same period last year.
5%; non-post net profit attributable to mother 1.
20,000 yuan, an increase of 23 in ten years.
In Q2, the average growth rate of revenue and profit was obvious, and the growth rate of engineering channels was obvious. In terms of channels, the company has established a variety of three-dimensional marketing models supplemented by retail entities, engineering, and e-commerce.The company increased the development of large real estate clients and realized project revenue in the first half of the year3.
3.8 billion, a 57-year increase of 57.
21%. While cooperating with existing large real estate clients such as Country Garden and Poly, new real estate clients such as Longhu, COSCO, Beijing Capital, and Baoneng are newly expanded. The rapid growth of engineering business is expected to continue; the retail channel is affected by the 杭州桑拿网 decline in real estate demand.It is expected that sales improvement will be under pressure in the first half of the year, but it will continue to advance beyond store expansion and upgrade, showing a trend of seasonal improvement.
By quarter, the company’s Q1-Q2 revenue increased by 0.
24% and 12.
99%, net profit increases each year.
66% and 21.
63%, the second quarter revenue growth accelerated significantly, excluding the impact of low bases in the same period last year, is expected to benefit mainly from the continuous volume of engineering channels and sales improvement in retail channels.
The gross profit margin increased significantly, during which the expense ratio remained stable: and the company achieved a gross profit margin of 31.
88%, an increase of 4.
54 averages, of which Q2 gross margin was 34.
06%, an increase of 5.
42 targets. The main indicators for the improvement of gross profit margin are: reduction of production costs brought about by intelligent transformation and upgrading at the production end, and an increase in the proportion of engineering channels with relatively high gross profit margins.
The initial company’s overall expense ratio is 18.
32%, which is basically stable compared with the same period of the previous year. The sales expense ratio has decreased slightly, the management expense + R & D expense ratio has increased, of which the R & D expense has increased by 35%; the financial expense ratio has been improved and reduced.
In addition, the loss of assets + credit impairment of first-tier companies was 2,261 million, a significant increase over the same period of the previous year, which was mainly affected by the significant increase in receivables.
Operating net cash flow has improved slightly in the short term, and the cash-to-cash ratio has improved: the company’s net operating cash flow was -0.
49 trillion, a decrease from the same period last year.
The actual company’s cash-to-cash ratio was 81%, a decrease from the same period of the previous year, and at the same time, the cash payment was significantly lower than the same period of the previous year.
Company period-end payables and bill 11.
30,000 yuan, an increase from the earlier period, including bills payable5.
07 trillion, an increase of about 2 earlier.
The US $ 600 million was mainly affected by the increase in commercial acceptance bills of large real estate customers under the continuous growth of engineering channels.
Investment suggestion: The company has been cultivating sanitary wares for more than 30 years, and the “Huida” brand has become a higher market awareness.
After the listing, the company will quickly expand its omni-channel marketing layout and capacity building. The distribution end-stores will be upgraded and the channels will be actively covered to cover the blank areas. The project will focus on the development of large real estate customers. The production capacity will be actively expanded to ensure expansion.
Intelligent and self-contained bathrooms open up new market space and help long-term development.
We expect the company’s net profit attributable to its parent to be 3 in 2019-2021.
6 and 4.
30,000 yuan, the corresponding EPS is 0.
17 yuan, the corresponding PE is 10 respectively.
5x; Maintain “Buy” rating.
Risk reminder: the risk of real estate industry fluctuations, market competition risks, exchange rate risks, anti-dumping risks.