Securities Times Network April 24th
17-year revenue growth in single digits, profit margins decline
In 2017, the company achieved operating income of 4.004 billion yuan, an increase of 7.09% year-on-year; net profit of returning to mothers was 360 million yuan, down 8.56% year-on-year; net profit of non-home return was 233 million yuan, down 25.24% year-on-year; EPS 1.11 yuan, 10 Send 5 yuan (including tax).
18Q1 realized revenue of 1.007 billion yuan, a year-on-year increase of 13.28%; net profit of returning to mother was 44.83 million yuan, down 25.20% year-on-year; net profit of non-home return was 31.73 million yuan, down 14.93% year-on-year.
Looking at the quarter, 17Q1-18Q1 revenue increased by 1.72%, 8.77%, 15.49%, 2.96%, 13.28%, net profit was 2.87%, -9.28%, -11.12%, -10.93%, -25.20%, respectively. The revenue side has rebounded slightly since 17Q2, and the growth rate of 18Q1 has benefited from the rapid growth of cotton yarn trading business. Net profit began to decline year-on-year in 17Q2, mainly due to the decrease in gross profit margin and the increase in financial expense rate. The gross profit margin of 18Q1 decreased more than The expense ratio caused the net profit to continue to decline.
From the perspective of expense ratio, the company's 17-year sales expense ratio and management expense ratio were 3.85% (-0.46 PCT) and 3.82% (-0.79 PCT), respectively, with good control fees and improved efficiency; but the financial expense ratio increased by 1.33 PCT to 2.31. %, mainly due to the appreciation of the RMB exchange rate, the exchange loss was 22.82 million yuan (the income for the same period of 16 years was 40.62 million yuan), and the total financial expenses increased by 153.56% year-on-year to 92.41 million yuan. The sales, management and financial expense ratios of 18Q1 were -0.55/-1.25/-0.42 PCT, respectively.
The main products of yarn-dyed fabrics declined slightly, and the distribution of export orders was more dispersed.
(1) According to the industry, textile and apparel (revenues accounted for 79%), thermal power and other income increased by 0.97%, 35.69% and 40.35% respectively.
(2) According to the products, the income from yarn-dyed fabrics, printing and dyeing fabrics, printed fabrics, shirts and cotton yarns increased by -1.63%, 8.47%, 596.84%, -27.59% and 35.40% respectively. According to the volume price split, the sales volume was -4.80%, +5.88%, +6506.95%, -18.17%, +1.62%, respectively, and the estimated sales unit price was +3.33%, +2.45%, -89.45%, -11.51%, +33.24%. Among them, the main products of yarn-dyed fabrics fell, the price of printing and dyeing cloth, cotton yarns rose, the price of shirts decreased (mainly for the 17-year shirt re-export trade decreased), the expansion of printing cloth capacity to promote rapid increase in sales.
(3) In terms of regions, domestic sales increased by 17.74% year-on-year, which increased from 36.88% in 16 years to 40.54% in 17 years; export revenue increased by 0.87% year-on-year, and orders were more distributed, including major sales countries in the US and Europe. The proportion of total revenue was 16.95% and 12.14% respectively, down 23.70% and 13.91% respectively. Japan (total revenue accounted for 0.96%) increased by 15.34% year-on-year. Total income of other countries increased by 34.90% year-on-year, and total revenue accounted for 16%. The year's 23.35% increased to 29.41%.
The decrease in gross profit margin was due to the increase in exchange rate and the increase in cotton prices. The gross profit margin for the 17-year period decreased by 2.63 PCT to 19.27%, mainly due to the appreciation of the exchange rate and the increase in raw material costs. In addition, the low gross profit margin business (printing and dyeing cloth, cotton yarn sales) Etc.) The increase in the ratio also has a negative impact on the overall gross profit margin. In terms of spin-off categories, the gross profit rates of the main products of yarn-dyed fabrics and printing and dyeing fabrics were 23.54% (-3.72 PCT) and 21.85% (+1.48 PCT), respectively.
The gross profit margin of 17Q1~18Q1 in the first quarter was 17.66% (-1.43 PCT), 18.66% (-2.32 PCT), 19.15% (-4.92 PCT), 21.39% (-2.00 PCT), 14.29% (-3.37 PCT), respectively. The gross profit margin for the single quarter was -5.73, +1, +0.49, +2.24, -7.10 PCT, respectively.
The gross profit margin continued to decline year-on-year in 17 years, mainly due to the appreciation of the exchange rate and the rise in raw material costs (cotton prices, coal prices, etc.). 1) In terms of exchange rate, the company's export revenue accounted for about 60%. The exchange rate has appreciated in 17 years. The impact is reflected in the impact of the company's RMB-denominated order price (which erodes gross profit margin) and the company's net US dollar. Assets are subject to exchange losses. The exchange rates of 17Q1~Q4 rose by 0.54%, 1.81%, 2.03% and 1.55% respectively. Since the beginning of the year, they have continued to appreciate by 3.74%, which has an adverse impact on gross profit margin. 2) At the cost end, cotton accounted for nearly 60% of the company's main product costs. The domestic cotton spot 328 price climbed to a high level at the end of the 16th year and stabilized at a high level in 17 years. The average price increased in 16 years. The average price of cotton 328 in the whole year of 17 years was 15,926 yuan / ton, which was 16% higher than the 16728 yuan / ton in the whole year of 16 years. The cost side brought some pressure. In addition, the company's main energy coal prices have also shown a year-on-year increase in 17 years.
Although the company slightly improved the price of the product in terms of rising costs and exchange rate appreciation (the sales price of yarn-dyed fabrics increased by 3.33% in 17 years), the price increase was less than the increase in cotton prices and the appreciation of the exchange rate, resulting in the gross profit margin. Still damaged.
The performance pressure in the first half of the year still exists, and the long-term focus on leading advantages and new capacity
The company expects the net profit of the mother to fall by 0~30% in the first half of the year. We believe that: 1) The sales capacity of the sales-side company's yarn-dyed fabrics is relatively full, and the future is expected to grow steadily (the growth is mainly due to product structure changes, such as the promotion of spot fabric models); in addition, the company's printing and dyeing fabrics, printed fabrics and shirts still have room for release. To contribute to future growth, and the company plans to build a home textile grey cloth project in Xinjiang and build a number of capacity projects in Ethiopia. After the release of production capacity, the company will further expand its development space. 2) At the subsidiary level, Lianfa Lingcai has reduced its net profit from -16.64 million in 16 years to -7.55 million in 17 years. Tianxiang Home Textile has gradually turned losses with the production capacity of home textile (printed cloth) (18 years has been profitable) The clothing own brand business is still in the incubation period after the direct transfer mode. 3) In the short term, the performance pressure, exchange rate appreciation, raw material cotton and coal price increase will have an adverse impact on the profit from 17 to 18h1. The exchange rate and cotton price trend will still need to be observed in the follow-up.
The company's operations are stable and its industry position is outstanding. In the long run, the leading edge and scale effect in the competition are expected to be released, and the ability to control fees is relatively strong and the operation is relatively solid. The dividend yield in 14~17 is 3.64%/5.45%/5.45%/4.55%, with low valuation and stable returns. There is some pressure on the short-term performance side, slightly lowering EPS in 18~19 years, and adding EPS in 2020 to 1.13/1.20/1.26 yuan, corresponding to 10 times PE in 18 years, maintaining the “overweight†rating.
Risk Warning: The increase in overseas demand is less than expected, resulting in a decline in the bargaining power of the company, less than expected production capacity, risk of cotton price fluctuations, and exchange rate fluctuations.
(Securities Times News Center)
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