China Jushi (600176) 2019 Third Quarterly Report Review: Price Under Pressure, Sales Under Pressure
Core point of view The company’s sales of roving products in the first three quarters were about 126 inches, an annual increase of 5%.
The sales volume in the industry’s trough period maintained a counter-trend growth.
However, the average price dropped 7% -8% year-on-year, resulting in pressure on performance.
In the long run, the industry has experienced the trough period of eliminating excess capacity, and the improvement of the future competitive landscape will benefit industry leaders.
The company’s operating income for the first three quarters of 2019 was 77.
38 ppm, an increase of ten years.
43%, net profit attributable to mother 15.
49 trillion, down 19 a year.
02%; net profit after returning to the mother is 14.
55 ppm, a decrease of 24 per year.
09%, basic EPS 0.
Q3 single-quarter operating income of 26.
76 ppm, a ten-year increase2.
47%, net profit attributable to mother 4.
95 ppm, a decrease of 23 per year.
Sales continued to grow, and lower prices caused pressure on performance.
The company’s sales of roving products in the first three quarters were approximately 126 inches, an annual increase of 5%.
The sales volume in the industry’s trough period can keep growing against the trend, indicating that the company has a clear competitive advantage as an industry leader.
Due to the continuous impact of the concentrated impact of roving production capacity in 2018, the company’s average price of roving products fell by 7% -8%, and it is expected that there will be downward pressure in the future.
The price of electronic cloth has dropped by about 50% every year, but it has now rebounded.
The gross profit margin for the first three quarters was 39.
91%, more than ten years.
The continuous decline in the price of glass fiber products in 20191-3Q put pressure on the company’s performance.
During the period, the expense ratio rose and market competition intensified.
The company’s expense ratio during the first three quarters was 17.
17%, an increase of 3 per year.
The sales expense ratio, management expense ratio and financial expense ratio are 4 respectively.
41%, rising by 0 each year.
13 of them.
45%.We judge that in addition to excess supply, sluggish downstream demand is also the intensification of competition and the primary reason for rising costs during the period.
Except for better wind power yarns, downstream markets have long been weak this year.
The long-term competitive landscape is expected to improve.
As the industry leader, the company’s gross profit margin has remained at 43% -47% for a long time.
The price fluctuated at the bottom of the boom cycle, and the company’s Q3 single-quarter gross margin fell to 38.
In contrast, many small and medium-sized enterprises in the industry are everywhere.
The profit pressure at the bottom of the cycle is expected to inhibit the further expansion of small and medium capacity in the industry. In the long run, the competition pattern is expected to improve.
Macroeconomic growth fluctuation risks, glass fiber prices rise risks, overseas projects are less than expected risks.
Profit forecast and investment advice.
Due to the impact of production capacity and its own competitive strategy, the average price of the company’s glass fiber products is still low, and there is further downward pressure, and short-term performance is under pressure.
From the perspective of the industry, the profit pressure at the bottom of the cycle will limit the further expansion of small and medium-sized production capacity and improve the long-term competitive layout.
Based on this, we lowered 杭州夜网 our 2019 revenue forecast to 101.
3 trillion, it is expected that the company’s net profit attributable to mothers in 2019-2020 will be 20 respectively.
5.6 billion, 23.
30,000 yuan, corresponding to EPS forecast of 0.
59 yuan, 0.
66 yuan (the original value is 0.
6 yuan, 0.
Give a target price of 9.
84 yuan, maintaining the “overweight” level.