Yutong Technology (002831): Performance Meets Expected Profitability Improvement

Yutong Technology (002831): Performance Meets Expected Profitability Improvement
Event: Yutong Technology released the semi-annual report for 2019, and the company’s revenue in 2019H1 was 36.8 ppm, an increase of 12 in ten years.1%; net profit attributable to mothers was 30,000 yuan, a year-on-year increase of 11.2%; net profit after deduction of non-return to mother 2.3 ppm, an increase of 16 in ten years.2%.The company achieved revenue of 1.9 billion yuan in the second quarter alone, an increase of 13 year-on-year.6%; net profit attributable to mother 1.4 ‰, an increase of 11 in ten years.8%; net profit after deduction is returned to mother 1.3 ‰, an increase of 6 in ten years.3%. The revenue of each product is maximized and the gross profit margin is reduced.In the first half of the year, the company’s comprehensive gross profit margin was 28%, surpassing and increasing by 3.4pct.Strong US dollar pattern and paper price downward trend (2019H1 coated paper / white cardboard / double offset paper / corrugated paper averaged 5594/4970/5998/3482 yuan / ton, respectively, down 22.9% / 21.4% / 19.5% / 14.9%) had a positive effect on gross margin improvement measures.In terms of quarters, the gross profit margins of Q1 / Q2 companies were 27.1% / 28.9%, increase by 1 every year.9/4.9 points.By product: 1) Revenue of boutique box 26.20,000 yuan, an increase of 7 in ten years.3%; gross profit margin 30.4%, an increase of 5 per year.1pct.2) Brochure revenue 3.100 million, an increase of 3 every year.6%; gross margin 33.4%, an increase of 2 per year.1pct.3) Revenue from cardboard boxes3.500 million, increasing by 3.7%; gross profit margin 15%, an increase of 2 in ten years.2pct.4) Self-adhesive realized revenue of 80.59 million yuan, an annual increase of 72.6%; gross margin 24.7%, down by 6 per year.4pct.5) Revenue from other businesses 3.3 ‰, an increase of 99 in ten years.5%; gross profit margin 18.7%, down by 5 per year.5 points. The expense ratio has increased, and the net interest rate has remained flat.2019H1 company sales expense ratio 4.6%, a decline 南京桑拿论坛 of 0 per year.1pct; the rate of management expenses (including R & D expenses) is 12.6%, 2pct a year.Including R & D expenses 1.79 trillion, an increase of 46 in ten years.4; financial expense ratio 2.7%, increase by 0 every year.7 points.Among them, the exchange loss was 32.12 million yuan (23.11 million yuan in the same period last year). We judge that the exchange loss mainly occurred in the first quarter.The company’s net profit in the first half of the year was 8%, which fell by 0 in one year.1pct. Accelerate the volume of new customers and optimize the company’s revenue structure.In the first half of 2019, the company increased the development of smart hardware, tobacco and alcohol, health, cosmetics and luxury products.Especially in the cosmetics and daily chemical markets, we have deeply expanded high-quality large customers such as Procter & Gamble, Unilever and L’Oreal. After the initial running-in, some new customers have gradually increased their orders.At the same time, Xiaomi, Lenovo, Harman, Shuijingfang and other large customers have increased incrementally.In addition, sales of Gore, OPPO, Guizhou Xijiu, and some international customers increased rapidly.From the perspective of the income structure system, heavy-volume customers are mainly concentrated in the fields of cigarette packs, wine packs, and cosmetics packaging, which helps the company to gradually reduce its dependence on consumer electronics products and create new growth poles. The trend of increasing concentration is optimistic that the company will open the packaging value chain.According to industry online data, the packaging industry is a trillion-dollar market industry, with the United States’ leading market share of CR2 packaging exceeding 60%, and the current growth rate of China’s leading packaging cities (CR2 2).7%), there is room for improvement in the future.We are optimistic about the cost advantage of Yutong Technology’s packaging design experience and scale effect. At the same time, the company’s front-end design capabilities and terminal delivery capabilities can significantly enhance customer credibility, and it is expected to become a leading Chinese packaging company in the future. Investment suggestion: We expect the company to achieve net profit attributable to mothers in 2019-2021.1, 14.1, 17.50,000 yuan, an increase of 17 in ten years.5%, 26.7%, 24.7%; corresponding to EPS 1.27, 1.6,2 yuan, maintaining the “overweight” level. Risk warning: industry competition intensifies risks, exchange rate fluctuation risks, and raw material prices rise significantly