18/03/2020

Boss Electric (002508) 2019 Third Quarterly Report Review: The Company’s Third Quarterly Reported Revenue Performance Exceeds Expected Operating Turning Point Reset and Increases Earnings Forecast

Boss Electric (002508) 2019 Third Quarterly Report Review: The Company’s Third Quarterly Reported Revenue Performance Exceeds Expected Operating Turning Point Reset and Increases Earnings Forecast
Investment Highlights: The company’s third-quarter earnings performance exceeded expectations.The company disclosed the third quarter report of 2019, and achieved operating income of 56 in the first three quarters.2.5 billion, an increase of 4 every year.29%, net profit attributable to mother 10.86 ppm, a ten-year increase of 7.31%, realized operating cash flow10.35 ppm, a reduction of 13 per year.78%.One single Q3 realized operating income of 20.98 ppm, an increase of 10 in ten years.56%, net profit attributable to mothers4.15 ppm, an increase of 18 in ten years.2%, to achieve operating cash flow3.77 ppm, an increase of 381 in ten years.97%.The company expects that the net profit attributable to shareholders of listed companies for the year 2019 will be 2% -10%.The company’s third quarter earnings performance exceeded our expectations of 8% and 10% growth rates, and submitted a beautiful answer sheet.  The increase in the volume of refined decoration projects has contributed to the increase in revenue, and the demand for recycling terminals for real estate completion has picked up.Judging from the company’s third-quarter operating performance, we have basically confirmed our judgment on the inflection point of the industry’s fundamentals: 1) The housing completion data in the second half of July-September continued to improve, and we judged the fine decoration brought by the difference between the new real estate construction and the narrowing of the completion scissors.The volume of residential properties drove the boss’s project channel revenue growth rate to exceed 100% in the third quarter; 2) The offline retail 深圳桑拿网 conversion industry’s terminal demand picked up. We expect the range to narrow from two in the first half to the next., JD.com and other new retail channel platforms have progressed; e-commerce and innovative channels are expected to continue their previous performance.3) At present, the company’s single-month production schedule has continued to perform well for 8 months, and the continuous improvement of its operating momentum is strong. In the fourth quarter, we expect that the growth rate of revenue and profits will continue to pick up, driving the revenue and performance to maintain a large number of growth.  The heavy volume of the project did not hinder the improvement of gross profit margin, and the dilution of expenses brought about an improvement in net profit margin.1) The company’s gross profit margin will be maximized in the third quarter 2.62 ptcs to 55.At 7%, we expect the cost of raw materials at the cost side to fall, and the incremental rate will decrease to contribute to changes: the average price of non-ferrous copper and aluminum in the Yangtze River in the third quarter dropped by 4 respectively.67% and 1.95%, cold rolled steel and China Plastics Index fell 4 in the third quarter.2% and 6.74%.The heavy amortization expense ratio of the engineering business, the company’s sales expense ratio and the management expense ratio in the third quarter decreased by 0.94 and 0.With 19 pcts, the R & D expense ratio and financial expense ratio are basically the same. Looking at the overall period, the expense ratio decreased by 1 pcts, which caused the non-recurring profit and loss, and the company ‘s net profit increased by 1 in the third quarter.3?19.8%.2) In terms of balance sheet, the company’s bills receivables and accounts have increased by a net amount since the beginning4.3 trillion, mainly due to the increase in revenue from engineering channels; the inventory reported in the third quarter has declined6.2%, advance receipts fell by 11% every year, indicating that terminal mobile sales accelerated, and channel inventory increased to a historical low.In terms of cash flow, the net cash flow from operating activities in the first three quarters was basically equal to the net profit attributable to mothers, showing a strong return on cash flow from sales.  Increase the company’s profit forecast for 2019-2021.We raise the company’s net profit forecast for 2019-2021 to 16.210,000 yuan, 18.28 ppm and 20.810,000 yuan (previous value was 16.06 billion, 17.69 ppm and 19.7.9 billion), an increase of 10 each year.0%, 12.8% and 13.8%, corresponding to 17 times, 15 times and 13 times the dynamic price-earnings ratio.Considering the continuous rebound of land completion engineering data, the increase in the volume of engineering channels and the trend of recovery in the retail industry, the company has outstanding competitiveness as a kitchen appliance leader and continues to maintain a “Buy” investment rating.

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