Zhongshun Jierou (002511): Better Q1 revenue and better expenses drive higher-than-expected results

Zhongshun Jierou (002511): Better Q1 revenue and better expenses drive higher-than-expected results

Event: The company announced the first quarter report of 2019 and achieved revenue of 15 in the first quarter.

4.1 billion, an annual increase of 25.

78%; net profit attributable to mother 1.

2.3 billion, an annual increase of 25.

18%; net profit after deducting non-profit increased by 33 in ten years.


The company intends to repurchase 2?
400 million shares, the repurchase price does not exceed 13.

69 yuan / share.

Comments: 1. Promote the diversified development of channels and drive the steady growth of revenue. Look at the channels that are well-divided. It is estimated that Q1 e-commerce and commercial sales channels will achieve a growth of more than 50%, and the distribution channels will increase by about 12%. It is expected to expand through the growth of company channels.In 19 years, the high growth of e-commerce and commercial sales is expected to continue.

In terms of offline channel expansion, the product coverage in the first quarter reached 1,804 counties and cities, a net increase of 13 at the end of the previous 18 years, and a net increase of 65 dealers. The company aims to increase 500 counties and cities in 2019.

As of the end of 2018, the company’s total production capacity is 66 tons. It is expected that in 19 years, it will add 10 tons in Hubei and 5 tons in Tangshan to provide guarantee for business development.

In the first quarter, due to the increase in the payment for goods and the decrease in payment for materials, the net operating cash flow increased by 342% per year; the inventory surplus decreased by 6 from the end of 18.


2. The gross profit margin decreased in each quarter, and the optimization of expenses drove performance beyond expectations.

01%, downgraded 4 in ten years.合肥夜网

8 pct, up 3 pct month-on-month, mainly due to the high gross profit margin of 1Q18. At the same time, the company’s pulp cost has fallen from a high level since December 18, driving the gross profit margin to have improved significantly. It is expected that Q2 raw material cost pressure is expected to further decrease.

In terms of product structure, in the first quarter, the proportion of high-margin products (FACE + LOTION + natural wood) revenue continued to increase, exceeding 65% (up 2pct from 18 years); we believe that the continued optimization of the product structure in the future is expected to form a more profitable company.Good morning support.

In the first quarter, due to the improvement in overall sales, marketing expenses exceeded the reduction, which caused the company’s Q1 sales expense ratio to decrease year by year.

7pct, simultaneous management + R & D, financial costs are reduced by 0.

9pct, 0.

8pct, driving the basic stability of the bilateral interest rate bilaterally8.


3. In 19 years, the channel was strengthened and fully opened, maintaining the “strongly recommended-A” rating as a domestic first-line brand for domestic tissues. The company’s marketing improved first. Good products took the channel express, continued to develop online and offline channels, and led the development of new products.Industry innovation, clear growth trend in the future.

At the same time, through continuous optimization of product structure, easing of cost pressure, and improvement of operating efficiency, we believe that the company’s overall profitability is still improving.

Employees’ shareholding achieves the same interests, and share repurchases demonstrate development confidence.

Expected 2019?
Net profit in 2021 will be 4.

900 million, 5.

900 million, 6.

US $ 900 million, a year-on-year increase of 21%, 20%, and 16% respectively. At present, the corresponding PE for 19 years is 27x, and the rating of “Highly Recommended-A” is maintained.

Risk reminder: continuous increase in pulp prices, economic growth leading to a substantial increase in demand for tissue paper

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