Shanghai Xiba (603200) Annual Report Commentary Report: Downstream Prosperity Warms, Gross Profit Pressures Net Profit, Boosts Industrial Water Service Leader, High Growth
On the evening of March 28, the company issued an announcement, and realized operating income of 41,360 in 2018.
480,000 yuan, an increase of 37 over the same period last year.
45%; net profit attributable to shareholders of the listed company 8,007.
920,000 yuan, an increase of 39 over the same period last year.
25%; the company realized expected earnings1.
08 yuan, an annual increase of 24.
The company’s performance continued to grow, basically in line with expectations.
The company intends to use the total 南宁桑拿 share capital as of December 31, 2018 as a base, to distribute a cash dividend of 3 per 10 shares to all shareholders.
3 yuan (including tax), 3 bonus shares will be distributed for every 10 shares.
In terms of industries, the performance of the steel, petrochemical, automotive and civilian sectors all increased.
In terms of products, engineering, dosing equipment, chemical sales and operation are all four product segments.
The company’s overall gross profit margin was 38.
20%, slightly lower than last year, but the decline has been smaller than expected.
The company’s net margin is 19.
43%. In the case of a slight decline in gross profit margin, the company strengthened the control of costs and expenses, so that the net profit was better than the same period last year.
In terms of revenue, the benefits of downstream industrial customers have picked up, the addition of EPC by Laoting Steel, and SAIC Volkswagen’s operating orders have significantly increased the company’s performance.
Revenue from the civil sector + other business sectors increased.
Increasing the output of the Yuanba Gas Field increased the revenue of the operating segment of the chemical industry, and the sales revenue of chemicals increased steadily.
From the perspective of cost: the proportion of material costs is stable, labor costs are reduced, project costs are increased, and overall management is better than expected.
Financial costs have continued to decrease, with the annual expense ratio falling by 17 during the period.
Cash flow is stable, asset-light operations, and cash on hand are abundant.
Due to the increase in the proportion of EPC projects in the income structure, the net cash flow from operating activities in the past 18 years has been repeatedly reduced.
The accounts receivable and inventory turnover rate both increased, indicating that the company’s operating efficiency has improved.
The company has cash in hand at the end of 18 years.
9.9 billion, increased short-term borrowings + payables, advance receipts, other payables increased, and the rejection rate rose to 18.
27%, still the nominal level of similar companies in the industry.
The company’s asset-light operation, the company’s depreciation amortization ratio still accounts for a small proportion of revenue.
Industrial water treatment operation performance improved, EPC project brought performance elasticity, and endogenous and steady growth.
The source of operating income comes from: a high proportion of revenue from top customers, stable payment, and high-quality one-stop operation services.
EPC orders greatly improve performance flexibility: Hesteel projects have landed one after another to generate revenue + “1 + 1” model to get more EPC projects + pave the way for subsequent operations.
The establishment of subsidiaries and the expansion of outbound mergers and acquisitions have become new drivers of growth, and the industrial chain has been further extended.
Equity distribution encourages core employees + completion of controller increase + distribution of cash dividends + bonus shares to enhance stock liquidity, and future performance is expected.
Earnings forecast and rating: We maintain our forecast for 2019-2020, and expect a net profit of 1 for 2019-2021.
61/2.1.7 billion, with EPS of 1.
14 yuan / share, corresponding to 31/24/18 times PE, maintain “Buy” rating.
Risk reminder: Existing risk of loss of major customers, supplementary industrial water orders exceed expected risks, and increased competition in the industry.