Jianlang Hardware (002791): The gross profit margin improved and the turning point continued to be fulfilled

Jianlang Hardware (002791): The gross profit margin improved and the turning point continued to be fulfilled

Event On August 27, 2019, Jianlang Hardware released its 2019 Interim Report, and the company achieved a total operating income of 20 in 19H1.

89 ‰, an increase of 31 in ten years.

96%; net profit attributable to mother 1.

2.1 billion, +283 per year.

69%, exceeding the performance forecast upper limit; net profit after returning to the mother after deductions1.

19 trillion, +345 a year.

27%, mainly due to the non-current assets disposal gains and losses (including the write-off of the provision for asset impairment) increased significantly to -2.11 million yuan (-68 in the same period last year.

80,000 yuan).

In terms of quarters, the company’s 19Q1 / Q2 single-quarter revenue was 8 respectively.

01, 12.

8.8 billion yuan, +31 per year.

30% / + 32.

38%; net profit attributable to mothers is 0.

07, 1.

1.4 billion, +123 a year.

02% / + 87.

59%.

The latest data from the National Bureau of Statistics shows that from January to July, investment in real estate development increased by 10 per year.

6%, a growth rate of 0 lower than the first half.

3 units.

The floor space of housing started by real estate development companies increased by 9.

5%, growth rate fell to 0.

6 units.

Funds for real estate development companies increased 7.

0%, the growth rate dropped to 0.

2 units.

At the end of July, the floor space of commercial buildings for sale nationwide decreased by 2.86 million square meters from the end of June, down by 8.

4%.

Comment on the advantages of product integration and continue to expand channels and R & D.

In 2019, the company continued to increase smart locks and other smart home, sanitary and hardcover room hardware products, and began to enter security, underground comprehensive pipe gallery, natural fire smoke exhaust and intelligent ventilation windows, labor safety protection products, fireproof and waterproof materials, mechanical and electrical equipment and precisionInstruments and other business areas can basically meet the one-stop procurement requirements of various types of construction hardware such as public buildings, commercial buildings, real estate, subways, airports, and pipe corridors.

While ensuring product quality, reduce the management cost of purchasing from multiple suppliers.

The company actively expands channel construction and currently has nearly 500 sales outlets at home and abroad.

At the same time, it continued to develop R & D. In 19H1, five national or industry standards were edited or participated in the compilation, and more than 180 were gradually completed.

In the first half of 2019, 8 invention patents and 28 other patents were obtained, and more than 700 patents were gradually obtained.

Gross profit margin benefited from the stabilization of raw material prices and improvement of income structure.

19H1 company gross margin +2.

18pct to 40.

16%.In the past three years, the proportion of stainless steel, aluminum alloy, zinc alloy and spare parts in the company’s production costs was 65.

76%, 66.

91% and 67.

39%.

In 2017-18, the company’s gross profit margin was affected by the increase in raw material prices to 38.

0%, prices of major raw materials have stabilized in 19 years.

At the same time, the income of 19H1 door and window hardware, furniture and stainless steel guardrail frame accessories increased by 36 times.

09% / 63.

32% / 42.

03%.

Among them, the high gross profit margin of door and window hardware is high, and the highest gross profit margin is +3.

07pct to 43.

49%, the proportion of income from 58.

88% increased to 60.

72%, driving the overall gross profit margin upward.

During the period, the expense ratio was well controlled, and the operating cash flow improved. The 19H1 company’s sales expense ratio, management expense ratio, research and development expense ratio and financial expense ratio were -2 respectively.

0 points / -0.

9pct / + 0.

3pct / + 0.

06pct to 20.

2%, 5.

4%, 5.

2%, 0.

04%.

Net margin quarter +3.

85 points to 5.

69%.

The increase in financial expenses was mainly due to the increase in bank borrowings and the increase in discounted bills. The decrease in sales and management expense rates was mainly due to the scale effect and per capita efficiency.

In 19H1, the company achieved net operating cash flow of -3.

0.94 million yuan, compared with the same period last year (-4.

6.2 billion yuan).

Investment suggestion: We expect the company’佛山桑拿网s operating income from 2019 to 2020 to be 47.

77, 58.

27 ppm, an increase of 24 in ten years.

0%, 22.

0%; net profit attributable to mother is 2.

79, 3.

530,000 yuan, an increase of 65 in ten years.

1%, 26.

5%; corresponding EPS are 0.87, 1.

10 yuan / share, corresponding P / E is 19 respectively.

11X, 15.

12X, maintain “Buy” rating.

Risk warning: raw material prices fluctuate, industry competition intensifies, and the downstream real estate industry fluctuates.