Zhongshun Jierou (002511): Beautiful semi-annual results, strong revenue growth, strong profit elastic transformation

Zhongshun Jierou (002511): Beautiful semi-annual results, strong revenue growth, strong profit elastic transformation

[Event]The company released its 201天津夜网 9 Interim Report and achieved operating income of 31.

72 ppm, an increase of 22 in ten years.

67%, net profit attributable to mother 2.

75 ppm, an increase of 37 in ten years.

59%, after deducting 41 for the next ten years.

95%.

By quarter, Q1 / Q2 revenue was 15 respectively.

4/16.

3 ‰, 25 per year.

8% / 19.

9%, net profit attributable to mother 1.

2/1.

5 ‰, 25 per year.

2% / 49.

7%.

[Comment]Strong revenue growth and profit elasticity conversion.

The company’s single-quarter revenue growth continued to be stable, and the profit elasticity benefiting from the decline in pulp prices has been reset.

Gross profit margin for the second quarter of 2019 was 39.

23% in one year, the chain rate has increased by about 5 pct, mainly due to the company’s continuous product structure upgrade and profit elasticity benefiting from the decline in pulp prices in the first half of the year.

Eventually, the broadleaf pulp is USD 541 / ton, which is 20% longer than the initial stage, and the conifer pulp is USD 595 / ton, which is 18% longer than the initial stage.

In the original decline process, the company also promoted profit growth by increasing sales expense distribution incentive channels, and the Q2 sales expense ratio was 20.

97%, management costs 4.

3% (about 24.5 million), eventually achieving 9.

28% net interest rate, temporarily increased by 1.

84%.

Products, channels and production capacity to build a clean and stable and strong moat.

The nature of household paper is a consumer product, and the continued performance of revenue reflects the company’s strong ability to expand channels.

New channels achieved rapid breakthroughs. Traditional channels continued to develop steadily. The company promoted revenue growth through the active layout of e-commerce, commercial sales and other channels. New channels such as mother and baby and new retail 厦门夜网continued to expand.The ratio has continued to improve. The ratio of FACE / LOTION / natural wood is about 60% or more, compared with 41 in 2017.

2%, and gradually rebuild the moat for its own development.

Profit forecast and investment rating: We are optimistic about Jierou’s future new channel layout. It is expected that the company’s EPS for 2019-2021 will be 0.

46/0.

62/0.

73 yuan, corresponding PE is 28/21/18 times.

The company has entered a high-speed growth period of performance and has ample future growth space. It maintains “strong recommendation”.

Risk warning: RMB depreciates significantly, and channel expansion fails to meet expectations.