Yonggao shares (002641): Interim report verifies the logical and logical capacity expansion of hardcover rooms opens up growth space

Yonggao shares (002641): Interim report verifies the logical and logical capacity expansion of hardcover rooms opens up growth space

19H1 was basically in line with expectations, with rapid growth in performance. On August 12, 2019, the company released its 2019 Interim Report. 19H1 achieved operating income of 28.

0.2 million yuan, a year-on-year increase of +20.

80%, increase by 2 every year.

56 points; net profit attributable to mother 1.

9.8 billion, a year-on-year increase of +138.

41%, an increase of 106 a year.

89 points.

Among them, 19Q2 achieved operating income of 16.

1.3 billion, a year-on-year increase of +15.

83%; net profit attributable to mother 1.

40 ppm, an increase of 85 in ten years.

20%, the performance basically meets our expectations.

The company is one of the leading domestic plastic pipe companies, benefiting from the trend of hardcover houses and increasing the main business of plastic pipes. At the same time, it has deployed diversified businesses such as solar energy and electrical switches.

40/0.

50/0.

60 yuan, maintain “Buy” rating.

Profitability remains high, and the structure of assets and liabilities needs to be optimized. The company’s profitability will increase, and the gross profit margin for sales in 19H1 will be 24.

74%, an increase of 0 a year.

89pct, net sales margin 7.

07%, an increase of 3 per year.

49pct; the company’s cost control has been further strengthened, with an expense ratio of 15 in 19H1.

73%, a decrease of 1 per year.

96 points, of which the sales / management / financial expense ratio decreased by 1.

11/1.

11/0.

10pct, R & D expense ratio rose by 0.

35pct; asset-liability structure needs to be optimized, 19H1 asset-liability ratio 44.

34%, rising by 0 every year.

29 pct.

Benefiting from the trend of hardcover houses, the cost rate is diluted and the net interest rate is increased. The trend of hardcover houses has profoundly affected the business model of the plastic pipe industry and favored the engineering model.

Provinces and cities across the country have successively introduced hardcover housing policies, and the proportion of hardcover housing is expected to steadily increase, thereby driving the growth rate of B-side home improvement building materials.

Yong Gao shares mainly focus on 2B business, and its direct sales model accounts for more than half of real estate projects. Therefore, the increase in the proportion of hardcover houses directly drives the company’s revenue growth.

The company’s net profit 厦门夜网 margin for the 18 years was 4% +, which was significantly lower than the level of China Union Plastics’ 10% + for the same period. It was caused by similar gross profit margins but different expense ratios.Leading closer to comparable companies.

In 19H1, the company’s PVC, PPR, PE, and solar products achieved revenue 14 respectively.

29/4.

88/5.

69/1.

47 trillion, a year-on-year increase of +21.85% / 4.

47% / + 14.

87% / + 26.

twenty one%.

Expansion of production capacity of plastic pipe main business, opening up room for growth The company has responded to the current trend of overweight plastic pipe main business and plans to issue convertible bonds to expand production capacity.

On June 25, 2019, the company disclosed the plan for the public issuance of convertible corporate bonds. The company intends to publicly issue convertible corporate bonds with a size not exceeding RMB 700 million, and plans to use 3 respectively.

37/2.

5 billion raised funds in Yueyang, Taizhou each newly built 8/5 injection plastic pipe production capacity.

After the above production capacity is completed, the company will increase the production capacity of 13-inch plastic pipes, and the production capacity will increase by about 20%.

The company focuses on the main business of plastic pipes, seizes the larger favorable time window of the trend of hardcover houses in the industry, and realizes rapid growth in operating income and profits.

The company’s profitability continued to be repaired. Maintaining the “Buy” rating benefited from the trend of hardcover housing and the integration of internal resources. The company’s 19H1 revenue growth continued to be stable and its profitability continued to be repaired. We maintain the company’s EPS forecast for 19-21 for 0.

40/0.

50/0.

60 yuan, reference can be better than company 14.

The estimated level of 42x. Considering that the company is benefiting from the trend of continued growth of hardcover housing, we believe that the company’s 19-year PE range is 15-16x, and the corresponding target price is 6.

0-6.

4 yuan, maintain “Buy” rating.

Risk warning: The price of raw materials has risen sharply; the price of products has fallen; the growth rate of sales has fallen short of expectations.