Zhongju Hi-tech (600872) Company Dynamics Comment: The profit has changed slightly and the vitality is gradually released

Zhongju Hi-tech (600872) Company Dynamics Comment: The profit has changed slightly and the vitality is gradually released

Matters: The company announced its 2019 Interim Report, which achieved revenue of 23 in 1H19.

900 million, an increase of 10 in ten years.

0%; net profit attributable to mother 3.

700 million, an increase of 8 previously.

0%, budget benefit is 0.

46 yuan.

Among them, 2Q19 achieved revenue of 11.

6 billion, an increase of 13 previously.

8%; net profit attributable to mother 1.

800 million, an increase of 4.

4%.

Investment points: 2Q19 performance was slightly lower than expected.

Performance breakdown: 2Q19 delicious fresh income increased by 15.

3% in line with expectations, net profit attributable to mothers increased by 8.

0% was lower than expected, mainly due to the higher-than-expected increase in management expenses.

The parent company made an error of 10.89 million in 2Q19, resulting in a consolidated report that the profit growth rate was lower than delicious.

The condiment is developing steadily, and the market expansion is gradually progressing.

The growth rate of the condiment business in 2Q19 was about 15%, which was similar to the growth rate in the first quarter. The benefits of the replacement reduction are reflected in the statement, because the company gave profits to channels.

In the second quarter of 19, the main category of soy sauce maintained a steady growth of 11%. It is estimated that the growth rate of extremely delicious single products exceeded 40% and is still the main source of growth.Exploited in the catering market; the growth rate of small categories such as oyster sauce and cooking wine was above 50%, still showing good growth of new categories.

From a regional perspective, in the second quarter of 19, the central and western regions and the northern regions were 23% and 22%, respectively. Maintaining high growth should be related to the company’s vigorous efforts to develop third- and fourth-tier markets and accelerate the coverage of blank markets.

In the first half of the year, there was a net increase of 111 dealers, with a total of 975 dealers at the end of the quarter.

Channel fission has shrunk, personnel control has been put in place, and the company’s market operation has become more refined.

It is estimated that the annual growth rate of condiment business is 15%.

Net profit in the second quarter of 19 exceeded expectations, and the increase in management expense ratio was preliminary.

Gross profit margin for the second quarter of 19 was 40.

3%, 0 in ten years.

9 points.

In view of the replacement of the parent company, the total gross profit margin of all subsidiaries in 2Q19 was reduced and downgraded.

6%, a small margin, more due to the increase in cost and price of packaging materials and the impact of product structure (lower gross profit margin of non-soy sauce categories increased).

The management expense ratio (excluding R & D expenses) of the consolidated statement for the second quarter of 19 decreased by 1.

4pct is the main factor that affects the growth rate of profits, mainly due to the increase in the position of management personnel, and the growth rate of employee social security costs.

The sales expense ratio was basically flat in the second quarter of 19, with no major impact.

1H19 Real estate business recognizes revenue of 0.

600 million, profit 0.

200 million, can also contribute positively to the consolidated statement profit.

The basic vitality is initially released, and it is expected to accelerate development in the medium and long term.

In 19, Baoneng officially entered the first year of Zhongju Hi-tech, and carried out multiple break-in work: First, to maintain the stability of the delicious fresh core management team and focus on 南宁桑拿 supporting the development of the condiment business; second, to establish a talent selection and training system internally to break through state-owned enterprisesSystem constraints, market management for team management.

The company’s announcement of an incentive evaluation system for core management personnel has increased the excess performance of excess incentives on an internal basis, replacing the lack of existing systems and forming a more market-based incentive mechanism.Withdrawal of minority shareholders’ rights has entered the arbitration stage, and the process may be slightly ups and downs, but the company fully promotes the matter.

We see that the improvement of Zhongju Hi-tech is gradually landing.

The company’s medium-term goal is “double hundred” in five years. The internal management mechanism is smooth. Zhongju is expected to make great strides forward. With the incentive system, it is expected to accelerate development in the medium and long term.

Earnings forecast and investment recommendations: The 19-year profit forecast is slightly reduced, and the EPS for 19-21 is expected to be 0.

89, 1.

08, 1.

33 yuan, an increase of 16%, 21%, 23% in ten years.

Taking into account actions such as detailed sales staff assessment and excessive incentives for executives in 19 years, the operation of condiments should be on a healthy development track.

If Baoneng can solve the historical problems of the company’s minority shareholders’ rights and improve continuously, it will continue to catalyze the company.

The merger and expansion of MSCI will replace China Torch Hi-Tech. It is still optimistic about the company’s development in the long term and maintains a “strongly recommended” investment rating.

Risk warning: food safety incidents, risk of fluctuations in raw material prices.