Yongxin Co. (002014) Annual Report 2018 Review: Plastic Soft Bag Leader Long-term Steady Operation and Continuous High Dividend
Investment Highlights: The company announced the 2018 annual report, and net profit attributable to mothers increased by 9.
7%, in line with our expectations; continued high dividends.
Revenue achieved in 201823.
3.2 billion, a 10-year growth of 16.
1%, realizing net profit attributable to mother 2.
2.5 billion, an increase of 9 in ten years.
7%; of which, in the fourth quarter of 2018, revenue reached 6.
7.3 billion, an increase of 17 in ten years.
4%, achieve net profit attributable to mother 0.
7.6 billion, an increase of 9 in ten years.
Operating cash flow in 20183.
2.4 billion, an increase of 16 in ten years.
Profit distribution plan for 2018: a cash dividend of 3 for every 10 shares.
50 yuan, the dividend ratio is 77.
5%, corresponding to the latest expected dividend yield of 4.
Leading companies in the domestic plastic flexible packaging industry have benefited from the steady growth of integrated industry revenue.
The company takes advantage of the industry reshuffle and transformation opportunities brought by environmental protection policies, and through technology innovation and integrated service processes throughout the process, it continues to increase the customer’s procurement share, and its revenue has steadily increased. Q1-Q4 revenue in 2018 increased by 19 in a single quarter.
2% / 14.
7% / 13.
6% / 17.
We expect that in 2019, the company will continue to benefit from industry consolidation, and revenue is expected to continue to grow steadily.
The cost side is pressured by the impact of raw materials, and the cost pressure is smoothly downstream.
The price of the company’s raw materials continued to increase from January to September 2018, which has squeezed the company’s profitability (the company’s main raw materials for plastic soft bags are PE, CPP and other petroleum derivatives.
The company’s complete and stable product and service system reduces the cost pressure downstream, while benefiting from the adjustment of customer structure and product structure, the gross profit margin improves quarter by quarter, and the gross profit margin for a single quarter in Q1-4 is 20.
9% / 21.
7% / 22.
1% / 22.
In the future, cost-effectiveness and product structure adjustment will be gradually realized, and the profit potential will continue to improve.
The new capacity will increase the main business to support the company’s future development; it will be implemented in stages to ensure that the capacity utilization is at a reasonable high level.
The company’s existing production capacity is distributed in Huangshan headquarters, Hebei Shijiazhuang and Guangdong Guangzhou base.
3 The first production line of the initial new-type functional packaging material project has been put into operation (a total of two production lines), and it will be put in stages to ensure a reasonable high level of capacity utilization.2 The construction of the initial ink technical transformation project has progressed steadily.
The capacity reserve provides a solid foundation for the increase in the number of orders and the need for structural optimization brought by the development of new customers in the future to ensure the stable implementation of the company’s business.
Benefiting from the reshuffle of the industry, the increase in the concentration of leading companies, and the expansion of the share of downstream brand customers, the company is expected to maintain a growth trend.
1) Tighter environmental protection + industry reshuffle, leading concentration increase: The company is an internal plastic flexible packaging leading company, entering consumer upgrades, high-end and high-quality products continue to sink channels, stricter environmental protection has led to industry reshuffle, leading concentration attempts to continue to increaseYongxin’s future market share will continue to expand, opening up room for performance growth.
2) Increase in market share of downstream customers: The downstream of the company is mainly food, daily chemical and other fields. Among them, the CR10 in the baked goods industry accounts for only about 15%, and the CR10 in the UK has reached 30%.
The company serves downstream leading consumer brands. With the increase in customer cities, the company’s orders are expected to continue to grow.
The plastic soft pack leader has a long-term stable business, benefiting from the industry consolidation trend.
In the early period, due to the rise in prices of upstream raw materials, the company was affected by cost growth and its profitability was under pressure.
However, it is good at long-term business competitive advantages in the industry, technology, management capabilities and accumulation of customer resources, and it is expected to benefit from the industry integration trend in the long run.
We maintain our profit forecast for 2019-2020 attributable net profit to 2.
$ 5.6 billion and 2.
The profit forecast for 95 ppm and an increase in attributable net profit in 2021 is 3.
3.9 billion yuan, corresponding to 0 EPS in 2019-2021.
51 yuan, 0.
59 yuan and 0.
67 yuan, currently consistent (7.
(29 yuan) PE corresponding to 2019-2021 is 14, 12, and 11 times. 北京SPA会所 Under a stable business model, it has an estimated margin of safety and maintains buying.