Zhongju Hi-tech (600872): Steady growth of main business, new incentive mechanism is more active

Zhongju Hi-tech (600872): Steady growth of main business, new incentive mechanism is more active

Event: The company’s total operating income in the first half of 2019

9.2 billion, an increase of 10 in ten years.

03%; net profit achieved 4.

0.6 billion, an annual increase of 8.

26%; Realize net profit attributable to owners of the parent company.

6.6 billion, an annual increase of 7.

99%.

Investment Highlights The growth rate of the first half of the year is in line with expectations. The Q2 company achieved total operating income.

USD 6.1 billion, an annual increase of 14%; net profit attributable to mothers1.

7.7 billion, an annual increase of 4.

43%.

In the first half of the year, due to the increase in the price of raw materials, the gross profit margin rose and dropped by zero.

38 perfect to 39.

82%; It is expected that the non-condiment business income and profit together will lead to a net profit margin of approximately 17% in the first half of the year, a year-on-year decrease of 1.

8 averages.

Considering that gross profit margin and net profit margin are still at a relatively high level, we believe that fluctuations in quarterly results are within the normal range.

The main business of condiment grew steadily in the first half of 2019, and the delicious fresh company achieved operating income22.

6.2 billion, an annual increase of 15.

26%; net profit attributable to parent company3.

6.2 billion, an annual increase of 20.

05%.

By quarter, the delicious fresh company achieved operating income10.

9.5 billion, an annual increase of 15.

51%; net profit attributable to parent company1.

7.6 billion, an annual increase of 9.

32%.

The revenue growth rate of the main condiment business is stable. The growth rate of Q2’s net profit end followed by the revenue growth rate, which is related to the company’s quarterly marketing expenses release plan. We still maintain the Air Force’s prejudgment for the increase rate.

The new incentive system is more active. The new incentive 南京桑拿网 system is more active. It is more inclined to assess income, more to reward middle-level business backbones, and more bonus packages.

We believe that the new performance appraisal and salary incentive system is more active, which is expected to stimulate the vitality of the company’s internal management team performance, thereby promoting the accelerated release of company performance and completing the company’s first five-year “double hundred” goal.

Based on the profit forecast and rating, we expect the company to achieve revenue of 47% in 2019-2021.

5.3 billion, 57.

6.6 billion and 70.

USD 4.2 billion, a year-on-year increase of 14%, 21% and 22%; net profit attributable to mothers respectively.

6.7 billion, 9.

6.8 billion and 12.

2.7 billion yuan, a year-on-year increase of 26%, 26%, 27%; corresponding EPS is 0.

96, 1.

21, 1.
54 yuan / share.
Corresponding to 2019 on 8/29, the dynamic price-earnings ratios for 2020 will be 43 times and 34 times, respectively. Maintain Buy rating.

Risk factors: Costs exceed expectations; costs exceed expectations