Jiangshan shares (600389) 2019 Interim Report comment: physical fitness continues to consolidate, substantial growth in real terms

Jiangshan shares (600389) 2019 Interim Report comment: physical fitness continues to consolidate, substantial growth in real terms

Core point of view The company’s net profit attributable to its mother increased for many years in the first half of the year.

88%, real growth is more obvious.

We are firmly committed to the company’s long-term development and management changes brought about by changes in shareholders.

Maintain the company’s EPS forecast for 2019/20/21 to 1.

48/1.

56/2.

06 yuan, maintain target price of 30 yuan and “buy” rating.

In the first half of the year, the company’s net profit attributable to its mother increased by 0 in ten years.

88%, real growth is more obvious.

The company achieved revenue of 25 in the first half of the year.

68 ppm, an increase of 29 in ten years.

31%; net profit attributable to mother 1.

850,000 yuan, an increase of 0 in ten years.

88%.

By quarter, Q1 / Q2 revenue was 12 respectively.

11/13.

5.7 billion yuan, net profit attributable to mothers was 90.98 / 93.96 million yuan, revenue and net profit continued to grow sequentially.

It is clear that the company accrued 2,492 at the end of June.

If the assets impairment provision of RMB 10,000 is not considered, the actual performance of the company’s Q2 should be RMB 118.55 million, an increase of 30 from the previous month.

45%, the actual performance in the first half of 209.43 million yuan, an increase of 14.
.

30%.

Such a substantial growth rate is commendable when the price of products is reduced and the public utilities are affected by the load of the park.

Expense projects focus on the continuous increase of R & D expenses.

Looking at the four expenses of the company, the sales, management, finance and R & D expenses in the first half of this year were 4,097 / 10,095 / 599 / 72.09 million yuan, an increase of 27.

81/7.

23/215.

52/155.

41%.

Among them, the growth rate of sales expenses is comparable to revenue; the management costs are controllable; the large growth rate of financial expenses is mainly due to the small base last year, which is generally the same; the R & D expenses themselves are constantly increasing.Growth, currently stable at more than 35 million yuan in a single quarter, R & D expenses accounted for 2% of revenue in the first half.

81%.

High R & D investment is an important guarantee for the company’s continued growth in the future. At the same time, it should be noted that the existing entities of the company except for Jiangshan Singapore Bonds replace 17% and other 25%. Gradually, the company’s R & D expansion will continue to have high growth, which will likely reach high technologyThe enterprise determined that 15 points of income tax benefits were realized.

The cash flow statement reflects the enthusiasm of the operation.

1. Operating cash flow

0.6 billion was the same as the previous decade, but the cash obtained from selling goods was 20.

520,000 yuan, the cash paid for the purchase of goods is 15.

92 megabytes, always increasing beyond the range.

2. Cash flow from investment activities-82.62 million yuan, of which “cash paid for purchasing 重庆耍耍网 and constructing fixed assets, intangible assets and other long-term assets” is 98.06 million yuan, which can be increased, and it is reported that payments for construction in progress may increase (including:7,600 tons of pesticide project, ene blocking agent project, No. 7 boiler expansion).
3. Cash flow from financing activities 3.
1.4 billion, mainly because the reported actual actual net increase was greater than the net increase in the same period last year (the chain has also expanded, Q1 is 1.
).

3.8 billion), is expected to be prepared for active business activities or new projects.

Overall, the semi-annual report reflects a more active and accelerated growth of Jiangshan shares.

M & A and new projects continued to advance.

In addition to the previously announced capacity building, the company is also accelerating in mergers and acquisitions and new enterprises.

1. Today the company announced that it will acquire 67% of the shares of Halimin in cash (for consideration of 2.

14.4 billion yuan, with a total consideration of 3.

200 million), Harbin’s revenue and net profit in 2017/18 were 1.

74/2.

02 billion and 27.64 / 3.49 million yuan (PE10.

23 times).

In the future, the company expects to start the acquisition of the remaining 33% equity (to PE10 in January 2022).

62 times acquisition).

2. The company announced on August 22 that the registration of the US subsidiary has been completed. In the future, the subsidiary will serve as the company’s headquarters in the Americas, engaging in pesticide registration, sales, trade, brand management, and technical consulting.

We can see that the company’s intention in outward development is positive.

Accelerate research and development to obtain technical products, and new production capacity will be built in 2019.

Since 2018, the company has continued to increase investment in research and development, and increased research and development expenses in 20181.

5.0 billion, an increase of US $ 3,238 million over 2017; the company continued to expand R & D investment in the first quarter of 2019, totaling 3,699 million, which has exceeded 2017.

Looking at the results, in 2018, the company added 12 new projects, and 8 of them passed the gate evaluation. In 2018, 24 formulation developments were conducted, of which 15 were mature and launched to the market.

Today the company also announced plans for new product investment and construction: 1) Investment 1.

200 million for the construction of 7,600 tons of new pesticide production capacity, which is expected to be completed in November 2020, and the annual profit after completion is expected to be 49.98 million yuan; 2) Investment 2.

41 trillion Jin is engaged in the construction of flame retardant capacity, which is expected to be completed in June 2020, and the annual profit after completion is expected to be 67.73 million yuan.

Risk factors: 1. Global agricultural product prices have fallen and pesticide demand has increased; 2. The company ‘s new capacity construction has exceeded expectations; 3. Macroeconomics has led to lower chemical product prices.

  Maintain “Buy” rating.

We are optimistic about the company’s long-term development and management changes brought about by changes in shareholders.

Maintain the company’s EPS forecast for 2019/20/21 to 1.

48/1.

56/2.

06 yuan, maintain target price of 30 yuan (corresponding to 20 times PE in 2019) and “Buy” rating.