Dongfang Yuhong (002271) Quarterly Report Commentary: Performance Exceeds Expectation, Equity Incentives Promote Development

Dongfang Yuhong (002271) Quarterly Report Commentary: Performance Exceeds Expectation, Equity Incentives Promote Development

Event: The company released the third quarter report of 2019: the company achieved revenue of 128 in the first three quarters.

950,000 yuan, an increase of 38 in ten years.

64%; net profit attributable to mother 15.

660,000 yuan, an increase of 40 in ten years.

55%; net profit after deduction to mother 13.

40,000 yuan, an increase of 31 in ten years.

06%.

In the third and third quarters, revenue was 49.

870,000 yuan, an increase of 35 in ten years.

23%; net profit attributable to mother 6.

50 ppm, an increase of 31 in ten years.

11%; net profit after returning to the mother 6.

15 ppm, an increase of 31 in ten years.

84%.

Opinion: Revenue grows steadily and performance exceeds expectations.

The company achieved revenue of 49 in 19Q3.

870,000 yuan, an increase of 35 in ten years.

23%, achieving net profit attributable to mother 6.

50 ppm, an increase of 31 in ten years.

11%.

The rapid growth in sales of waterproof membranes has steadily increased revenue and exceeded performance expectations.

With the gradual release of production capacity and continuous improvement of production capacity, the company’s revenue will continue to increase.

The gross profit margin was small, the expense ratio dropped, and cash flow was under pressure in the short term.

In terms of gross profit margin, the company’s gross profit margin for the first three quarters of 19 was 36.

46%, a decrease of 0 every year.

11 points.

In terms of expense ratio: the company’s expenses during the period21.

57%, a decrease of 0 every year.

99pct, sales / management / financial expense ratios are 11 respectively.

92% / 7.

22% / 2.

42%, respectively, the change is -0.

15 / -1.

91 / +1.

06 points.

Finance costs increase by 147 per year.

54% was due to the increase in additional expenditures such as borrowings and convertible bonds.

The company’s net cash flow from operating activities decreases by 285 each year.95%, short-term pressure on cash flow, mainly due to the increase in cash for the purchase of goods and payment of performance bonds.

The third phase of the stock incentive plan was launched to demonstrate the company’s confidence in long-term development.

In September 2019, the company released the third phase of the supplementary stock incentive plan, which is intended to grant no more than 3296 to 2189 incentive objects.

610,000 shares per share, accounting for about 2 of the company’s total share capital.

21%, the grant price is 10.

77 yuan / share.

The equity incentive plan has expanded the scope of incentives, which is beneficial for the company to motivate middle management and business backbone talents, and to stimulate teamwork.

The company’s performance appraisal target is to have a net profit of no less than 19 in 2020/2021.

13/23.

91 trillion, 2022/2023 net profit growth on the basis of 2019 is not less than 72.

西安耍耍网8% / 107.

36%, showing the company’s confidence in long-term development.

Earnings forecast and estimation: EPS are expected to be 1 in 19-21.

41, 1.

84, 2.

31, corresponding PE is 16X, 12X, 10X.

Give “Buy” rating.

Risk warning: downstream land demand is less than expected, raw material prices rise sharply