Zhongshun Jierou (002511) Quarterly Review: Q3 Profitability Continues to Increase, Sun Brand Covers Mid-Market

Zhongshun Jierou (002511) Quarterly Review: Q3 Profitability Continues to Increase, Sun Brand Covers Mid-Market

The performance increased rapidly, and the proportion of high-end products increased the company’s operating income in 19Q1-348.

200,000 yuan (+18.

11%), net profit attributable to mother 4.

3.8 billion (yo + 39.


Of which 19Q3 operating income was 16.

4.7 billion (+10 compared to the same period last year).

21%), net profit attributable to mother 1.

6.3 billion (+44 compared to the same period last year).


The company expanded sales of key products, gradually increased the proportion of high-end products, and introduced new products with high gross profit. The gross profit margin increased in the first three quarters.


The cost of raw materials has been reduced and gradually adjusted to improve profitability, which has led to a decline in the price of wood pulp, an increase in the proportion of high-end products 杭州夜网论坛 and substitution adjustments. The company’s gross profit margin was 19Q241.

37% (+8 YoY).

19pct), setting a new historical high.

Judging from the forward quotations of large factories and port inventory, the short-term pulp price has room to reduce. Considering the promotion of the Sun brand and sanitary napkin products, the company’s raw material inventory is at a relatively low level at the end of the reporting period. It is expected that the gross profit margin in 19Q4 will still increase.

On the basis of the continuous development of new products such as the “Sun” brand and sanitary napkins, the company continuously reports new products of the “Sun” brand to promote differentiated product development. The integration of a bamboo base and paper project in the Sichuan base to the upstream of the industrial chain can reduce pulp price fluctuations.Impact on earnings stability.

At the end of 2018, the company added new retail channels and mother-to-child channels, and during the JD 618 period, the company launched the world’s first sanitary napkin affiliated with the company, such as Dolly Honey. The company’s new products are expected to replace alternative channels and quickly enter the market.

Profit forecast and investment advice Two-wheel drive of product channels builds the company’s core competitiveness. The proportion of high-margin products is increased and the product structure is adjusted. The production capacity of each production base is planned to increase.

It is estimated that the main business income in 19-21 will be 69.

03, 82.

63, 98.

9.2 billion, net profit attributable to mother 6.

35, 7.

66, 9.

18 trillion, the current market value corresponds to 27 in 19 years.

60xPE, taking into account the company’s channel expansion advantages and new product development core barriers, maintain a reasonable estimate of 30x19PE, corresponding to a 19-year reasonable value14.

82 yuan / share, maintain BUY rating.

Risks suggest that the macroeconomic growth rate is higher than expected; environmental protection supervision tends to seriously increase the environmental protection costs of the industry; the price of wood pulp continues to increase, and the company’s expansion of market gaps gradually exceeds expectations, stimulating cost risks.