Qibin Group (601636) 2019 Third Quarterly Report Review: Turning Point of Performance Growth Appears

Qibin Group (601636) 2019 Third Quarterly Report Review: Turning Point of Performance Growth Appears

Report Summary: Incident: The company released the third quarter report of 2019, and achieved a total of 65 operating income in the first three quarters.

32 ppm, an increase of 7 per year.

6%, net profit attributable to mother is 9.

27 ppm, a decrease of 3 per year.

33%, a sharp decrease compared to the 2019 Interim Report, and realized a zero return.

35 yuan.

In terms of single quarter performance, the company achieved net profit attributable to mothers in Q3 20194.

09 million yuan, a 34-year increase of 34.

6%, ending many negative increases since 2018Q4.

Single quarter return to mother’s net profit hit a record high.

The increase in the ex-factory price of glass and the decrease in the price of heavy alkali in raw materials are the main reasons for the improvement in the third and third quarter results.

Qibin Group’s main markets are in East and South China. According to the company’s 2018 annual report, the company’s revenue is 49.

.

08% come from East China, 27%.

45% comes from South China.

Taking the delivery price of Zhangzhou Qibin Futures in Fujian as an example, the daily delivery price of 5MM float glass in the company’s main market rose from 1,427 yuan / ton at the end of June to 1,506 yuan / ton at the end of September 2019, with a single third quarter interval increase.5.
54%.

The prices of heavy soda ash for raw glass raw materials have both declined in East China and South China, with a decrease of 2.

63% and 5.

13%, Cibin Group is a heavy-asset domestic float glass leader. Production line capacity penetrates. Production and sales of glass original sheets are basically balanced. There is less room for output growth. Under the background of rising glass prices and falling raw material prices, the company’s performance is flexible.In the third and third quarter results are expected to further improve in line with our expectations.杭州桑拿网

The company’s inventory at the end of the third quarter increased by 51 from the beginning of the period.

04% is due to the increase in inventory products brought by the increase in production capacity and the company’s strategic reserve of heavy soda ash at low prices. Raw material supply companies with low-priced reserves should respond to raw material price risks and improve the company’s ability to control the cost side.

Operating net cash flow has declined, but still has a dividend basis.

In the first three quarters of 2019, the company’s net cash flow from operating activities was 10.

23 ppm, a decrease of 26 from the beginning.

42%, initially three: 1. The report resulted in an increase in the working capital caused by the commissioning of new capacity; 2. The sales of energy-saving glass increased the company’s accounts receivable by 69 compared with the beginning of the period.

71%; 3. The company made a large number of strategic reserves while the price of heavy soda ash dropped.

As one of the leading glass companies, the average annual operating cash flow has been above 700 million since 2013, and even reached 23 in 2017.

500 million.

The company’s average annual net profit is distributed in cash. Except for 2014 (the industry’s prosperity has not only declined and it is expected to be pessimistic), it has not distributed infrared rays. The annual dividend ratio is not less than 30%, and even as high as 71% in 2017.

Although the company’s first three quarters of 2019’s operating net cash flow has decreased, it is still at a historically high level. We believe that continued dividend distribution in 2019 will be a high probability event. According to the historical lowest dividend rate of 30%, the current division level is about 4%.If you follow the historical highest dividend rate, the current dividend rate will reach about 9%.

Medium- and long-term development planning and equity incentives have helped the glass leaders improve their long-term development.

In September 2019, Qibin Group announced the “Outline of Medium- and Long-Term Development Strategic Planning (2019-2024)” (hereinafter referred to as the “Strategic Outline”), the “Shareholding Plan of the Business Partner (Draft)” and the “The first phase of the company’s employee shareholding plan (draft) and other company documents, while setting the company’s long-term development plan, using employee shareholding plans and partner shareholding plans to deeply bind the interests of employees, employees and the company.

According to the company’s “Strategy Outline”, the company will achieve revenue of over 10 billion in 2021. Based on 2018 revenue, the company’s CAGR target for 2018-2021 is as high as 6% and the ROE is not lower than the 80th place of comparable companies in the same industry.Value, the revenue target in 2024 is to exceed 13.5 billion.

While planning to become bigger and stronger, the company has launched a series of professional partner shareholding plans and the first phase of employee shareholding plans to stimulate the overall entrepreneurial vitality of the company through interest binding. We believe that the combination of “target + strong incentives”The combination will effectively promote the long-term development of the glass leader, and Qibin Group will be more high-quality in terms of company operations.

At the same time, it is believed that since the glass business of Qibin belongs to a typical segmented industry, and its performance is affected by macroeconomic conditions, the company’s mid- and long-term development plan puts forward long-term and stable requirements for performance growth, while also using ROE asAssessing the target means that the company intends to reduce its own performance at the strategic level. We will see a high probability that the company will still strive to maintain capacity expansion during the downward phase of the cycle to increase the city’s share. At the same time, the cost reduction is worth looking forward to.

Earnings forecast and investment rating: We expect the company’s EPS from 2019 to 2020 to be 0.

47 yuan, 0.
56 yuan and 0.
62 yuan, the corresponding dynamic PE is 8 times, 7 times and 6 times.

Taking into account that the company’s performance growth rate is rapidly entering an inflection point, the single-quarter growth rate has turned from negative to positive; the increase in glass prices has driven the company’s performance elasticity; the allocation rate is high; the medium and long-term planning and employee incentive plans help the company’s further development; low valuation;Recommended “investment rating.

Risk warning: The improvement in the price of glass is persistent and less resilient than expected.