Dongfang Yuhong (002271) 2018 Annual Report Review: Steady Development of Waterproof Faucet Enters Harvest

Event: On March 27, the company released its 2018 financial report.

The company achieved a total operating income of 140 in 2018.

46 ppm, an increase of 36 per year.

46%, achieving net profit attributable to shareholders of listed companies.

08 million yuan, an increase of 21 in ten years.

75%.

The initial gain is 1.

01 yuan, an annual increase of 21.

69%, a cash dividend of 3 yuan (including tax) for every 10 shares.

Viewpoint: Sales volume increases and operating income continues to grow.

The company achieved a total operating income of 140 in 2018.

46 ppm, an increase of 36 per year.

46%, mainly because the company’s product sales continued to grow rapidly.

In terms of quarters, the company’s operating income for Q1-Q4 in 2018 was 19 respectively.

50,000 yuan, 37.

08 billion, 36.

88 ppm and 47.

4.5 billion, corresponding to revenue of 27.

16%, 31.

84%, 38.

63% and 42.

82%, the operating income showed a continuous growth trend, Q1-Q4 revenue growth increased quarter by quarter, a good momentum.

In terms of sales and prices, the company sold a total of 6 waterproof materials in 2018.

3.3 billion square meters, an increase of 46 in 2017.

27%, the average price per unit of waterproof material is 17.

85 yuan / square meter, commented on 19 in 2017.

20 yuan / square meter is reduced by 1.

The 35 yuan / square meter is mainly due to the company’s rapid occupation of the market in order to increase market share and price reductions, so revenue growth is not as fast as sales growth.

The company’s sales of waterproof materials accounted for 80% of its operating revenue in 2018.

42%, basically the same as in 2017, of which waterproofing membrane revenue accounted for 52 of operating revenue.

11%, waterproof coating revenue accounted for 28 of operating income.

31%.

Waterproofing construction construction revenue accounts for 13% of operating revenue.

89%, other income accounts for 4 of operating income.

85%.

In addition, material sales revenue accounted for 0 of total operating income.

84%, about 0 in 2017.

46% improvement, material sales business income increased by 151 every year.84%.

In terms of different regions, mainland China is still the main source of company’s operating income, accounting for 99% of operating income.

03%, Hong Kong and Macau’s operating income accounted for 0%.

02%.

In addition, other countries and regions contributed 0.

95% of operating income, about 0 in 2017.

56% had a baseline increase, and the amount of operating income in other countries or regions increased by 133.

65%.

Cost control is good. The gross profit margin decreased due to the price reduction, and the expense ratio decreased as a whole.

The company achieved operating profit in 2018 18.

180,000 yuan, an increase of 26 in ten years.

92%, achieving net profit attributable to shareholders of listed companies.

08 million yuan, an increase of 21 in ten years.

75%.

In terms of quarters, the company’s net profit for Q1-Q4 in 2018 was 9,781, respectively.

970,000 yuan, 5.

1.9 billion, 4.

98 ppm and 3.

95 ppm, corresponding to a net profit margin of 26.

11%, 25.

46%, 25.

72% and 11.

63%. In the fourth quarter, the company’s operating profit maintained a high growth level. The decline in net profit growth was mainly due to the increase in actual income rate.

Against the background of rising bulk raw material prices, the company better controlled product costs.

In 2018, the company’s average cost for waterproofing materials was 11.

16 yuan / square meter, commented on 11 in 2017.

39 / m2 is reduced by 0.

23 yuan / square meter.

From the perspective of cost components, the company has better cost control in terms of direct labor, fuel power and manufacturing expenses, and its share of operating costs in 2017 has declined slightly.

Affected by rising raw material prices, direct materials accounted for 90% of operating costs in 2017.

76% rose to 91.

02%, but in general, the cost control of raw materials is better, mainly because the company has established strategic cooperation relationships with upstream major raw material suppliers by using the advantages of scale operations to ensure that the company can obtain the main raw materials at a relatively stable price for a long timeAs a result, operating costs are not hindered.

Based on the factors of product price reduction, the gross profit of the company’s waterproof materials in 2018 was 6.

69 yuan / square meter, commented on 7 in 2017.

81 / sqm decreased by 1.

12 yuan / square meter, gross margin of waterproof material is 37.

48%, a decrease of 3 per year.

twenty one%.

Taking into account the impact of other businesses such as waterproof construction, the company’s overall gross profit margin was 37 in 2017.

73% fell to 34.59%.

In terms of period expenses, the company’s sales expenses, management expenses and financial expenses increased in 2018 due to the expansion of sales scale.

Selling expenses expense 12.

09%, increasing by 0 every year.

The total of 62 is due to the increase in advertising expenses, promotion expenses, etc .; management expenses 8.

44%, ranking down 1 in 2017.

74 units, the company has a good management and control of labor costs; financial costs1.

37%, an increase of 0 every year.

The 37 aspects are mainly due to the increase in expenditure and increase in factoring expenses in 2018.

In addition, the company’s R & D expenses increase by 31 each year.

62%, R & D expenses accounted for 1% of operating income.

91%, little change from 2017 rating.

The organizational structure was adjusted, and the speed reduction and efficiency improvement were developed steadily.

On October 31, 2018, the company adjusted its organizational strategy and organizational structure.

This adjustment is based on Dongfang Yuhong’s consistent excellent development potential and combined with the rapid response made by the domestic and foreign economic environment, the original “1 + 6” business group was restructured into Engineering and Construction Materials Group, Civil Building Materials Group, and Tiandingfeng, An investment 南宁桑拿 holding company, of which the Engineering and Construction Materials Group is divided into three regions, namely North District, East China District, and South China District.

The company strives to integrate the value industry chain and channel superior resources through a new organizational structure to achieve breakthrough management. The new partner system is enhanced to increase project comprehensive evaluation incentives.

Conducive to company cost control and resource sharing of different channels.

The company has outstanding advantages in scale and solid leadership. From 2019, the company entered a stable development stage, from a rapid growth period to a capacity release period and a harvest period.

Profit forecast and investment rating: It is expected that the company’s EPS from 2019 to 2021 will be 1.

39 yuan, 1.

80 yuan and 2.

21 yuan, corresponding 杭州桑拿网 to PE is 15 times, 12 times and 10 times respectively. Considering the company’s outstanding scale advantage, brand effect brings comprehensive competitiveness, the national layout reduces costs, and benefits from the construction of the Greater Bay Area and Xiong’an New District.

Upgrade the company’s investment rating to “strongly recommended”.

Risk warning: The real estate industry is weaker than expected.