Zhongshun Jierou (002511) 2018 Annual Results Express Commentary: Steady Growth in Performance Focusing on 19 Years of Cost Improvement
I. Overview of the event On February 26, the company released the 2018 annual results report.
In total, the company expects to realize revenue of 56.
7.9 billion, an annual increase of 22.
43%; net profit attributable to mothers4.
40,000 yuan, an increase of 15 in ten years.
87%; realized basic profit income of 0.
Second, analyze and judge the 18-year performance growth maintains a steady growth rate. Restructuring company revenue, net profit attributable to mothers increased by 22% and 16%, of which Q4 revenue and net profit attributable to mothers increased by + 24% and -10%.
The increase in sales volume brought about by the increase in prices in 4Q17 and the expansion of the demand side kept the company’s revenue growth steady.
In terms of profit, if it is calculated based on the three-month inventory cycle, high-priced inventory pulp may cause pressure on the profit side of Q4.
With the apparent decline in Q4 pulp prices, the company’s cost-side improvement will gradually emerge.
Since the beginning of the year, the price of wood pulp has continued to rebound. There is still some pressure to continue upward. In the fourth quarter of last year, the downward pressure on the domestic economy and the intensified trade friction led to the overall weakness of the demand side of the paper industry.
Since 19 years, domestic wood pulp prices 杭州夜生活网 have rebounded by about 5 from the bottom.
4%, mainly because the post-holiday construction has driven the demand side, and trade frictions have also developed in a positive direction.
However, the current port inventory is still high. At the end of January, Qingdao port and Changshu port reached historical highs of 101 and 59 respectively.
Destocking has not yet begun. It is expected that the uplink of the pulp price will continue to extend in the future. In 19 years, we need to focus on the improvement of the company’s cost side.
Channel and capacity mergers and acquisitions have contributed to continued growth in performance. In terms of capacity, the expansion project of Tangshan Branch and the construction of the second phase of Yunfu Zhongshun Project were completed, with an annual capacity increase of approximately 14.
5 At least, it is expected that about 10 cases of production capacity will be put into production each year in the next five years.
In terms of channels, there are only more than 1,000 of the more than 2,800 counties and cities in China that need to be developed by the company. Since 15 years, the company has set up a new marketing team to strengthen the penetration of undeveloped regions.
Third, investment recommendations Product structure optimization, capacity release, channel expansion is expected to drive the company’s growth, the company is expected to achieve basic income of 0 in 2018, 2019 and 2020.
32 yuan, 0.
40 yuan, 0.
48 yuan, corresponding PE is 26X, 20X, 17X.
The company’s PEG was significantly less than 1 in 19, and continued to be underestimated, maintaining the company’s “recommended” rating.
4. Risk warning: the price of raw materials fluctuates sharply; capacity expansion is less than expected; terminal demand is weak.