Dongfang Yuhong (002271): Leading High Growth Still Stable Cash Flow

Key points of investment risk warning: Event: The company disclosed the third quarter report of 2019, and achieved operating income of 128 in the first three quarters.

9.5 billion, an annual increase of 38.

6%; net profit attributable to mother 15.

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

5%; basic income 1.

05 yuan.

Among them, the third quarter report realized operating income for the first time.

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

2%; net profit attributable to mother 6.

50 ppm, an increase of 31 in ten years.

1%; basic return is 0.

44 yuan.

Opinion: Revenue and profit continue to grow rapidly.

In the third quarter of 19, driven by new real estate construction and increased industry concentration, the company’s sales continued to grow at a rapid rate, and its revenue increased by 35.

2%, affected by the base, slightly lower than 40 in the first half.

9% growth level; attributable net profit increases by 31 each year.

1%, slightly lower than the growth rate of revenue, mainly due to Q3 single quarter actual income rate reached 23.

6%, an average annual increase of 15 percentage points, to a certain extent, lower the level of net interest rate.

The gross profit margin is stable, and the total expenses are reduced.

Benefiting from the adjustment of the company’s organizational structure and the implementation of staff reduction and efficiency improvement since 18 years, the company’s expense ratio during the 19Q3 period has dropped significantly, compared with the same period last year.


Among them, the management expense ratio (including research and development) fell the most significantly, continuously falling2.

7 points to 5.

68%; sales expense ratio decreased by 1.

6 points to 9.

77%, the lowest value in the same period in the past 9 calendar years; the financial expense ratio increased, ABN interest expenses increased, convertible bond interest increased, and so on, while increasing 0.

87 points to 2.


Overall cash flow was stable, and receivable turnover improved.

In terms of accounts receivable, the company’s accounts receivable turnover rate reached 2 in the first three quarters.

33 times, a year increase of 0.

36 times, an increase of 0 from the previous month.

81 times.

Accounts payable turnover rate reached 3.

06 times, reduced by 3 every year.

49 times, an increase of 1 from the previous quarter.

19 times.

The decrease in the accounts payable turnover rate was mainly due to the growth of the industrial chain. Since the second half of last year, the company has extended the payment period of some accounts payable, resulting in an increase in accounts payable this year. Investment suggestion: The company is a leading waterproof material company in the country, and then the real estate developer’s improvement of the hidden project improvement and the company’s own production capacity expansion have further expanded the gap with the second echelon.

At the same time, relying on waterproof materials, the company has entered the market of architectural coatings and insulation materials, and the customer’s synergy is obvious, which is expected to become a new profit growth point.

We adjust our profit forecast and expect the company’s net profit attributable to the parent to be 21 in 2019-2021.

700 million, 26.

2 ppm and 34.

40,000 yuan, closing price on October 28 corresponds to PE of 15.

5 times, 12.

8 times and 9.

7x, maintaining the rating of “prudent increase”.

Risk warning: demand exceeds expectations, and raw material prices grow beyond expectations.