Guangming Dairy (600597) Interim Review: Distributors significantly increase new injections to inject new vitality
Commentary event: Bright Dairy released its 2019 Interim Report and achieved revenue of 110 in the first half of the year.
90ppm, net profit attributed to mother 3.
6.7 billion, attributable to non-net profit3.
9.8 billion, with annual growth of 4%.
90%, net interest rate 3.
31%, a year up 0.
14 points; single quarter revenue 56.
3.8 billion, net profit attributable to mother 2.
2.6 billion, attributable to non-net profit2.
2.7 billion, an increase of 3 each year.
60%, net interest rate 4.
03%, rising by 0 every year.
Domestic dealers increased, and overseas new Wright steadily developed. In the first half of 2019, the company achieved revenue of 110.
90 ppm, a ten-year increase4.
91% (first quarter: 6.
92%; Q2: 3.
1) By product: Liquid milk sales64.
92 ppm, other dairy products 32.
1 billion yuan, animal husbandry products 9.
5.3 billion, others 3.
5.7 billion, an increase of 4.
54%, revenue growth was mainly contributed by the dairy products business. The decrease in animal product income 北京桑拿 was mainly due to the decrease in trade revenue.
2) By region: Shanghai revenue 28.
2.4 billion, field 58.
02 billion, overseas 23.
8.7 billion, an annual increase of 6.
22%, the amount of new Wright led to overseas sales growth.3) Sales method: direct sales revenue29.
8 billion, 77 dealers.
1.7 billion, others 3.
1.5 billion, an increase of 3 each year.
94%, 7%, -48.
20%, dealers are selling well. In the first half of the year, the number of dealers increased by 794, Shanghai increased by 145, and overseas increased by 649.
Looking into the future, we believe that the company’s room temperature milk business is growing at a stable rate, the low temperature milk business is trying to develop its strength, overseas business is developing steadily, and revenue is slowly increasing.
Rising raw milk prices have lowered gross profit margins, and the net profit margins of supplementary expenses have increased by the company’s gross profit margins in 2019H132.
80%, zero for ten years.
68pct (Q1: 32.
24% /-2 per second.
07pct, Q2: 33.
34% / decade +0.
63pct), the decline in gross profit margin was mainly affected by rising raw milk prices.
The cost rate during the period is 25.
83%, down by 1 every year.
15pct, of which the sales expense ratio is 21.
82%, down by 1 every year.
12pct, mainly due to the decline in advertising costs, marketing and sales service costs.
Net interest rate 3.
31%, a year up 0.
14pct. In the case of a decline in gross profit margin, the increase in net profit margin was mainly due to the decrease in expense ratio.
The latest performance of the company’s board of directors on July 6 agreed to increase by no more than one.
$ 500 million in marketing expenses for the company’s 2019 Everbright brand marketing project.
Looking ahead, we believe that the company’s sales expense ratio will remain at the historical average level, and increased marketing expenses will contribute more increments to the company’s revenue.
The new leadership brings new vitality. After the acquisition, the old tree does not insert new flowers. In June 2019, the company hired Mr. Huang Liming as the deputy general manager of the company, and his colleagues served as the general manager of the normal temperature marketing center.
Mr. Huang Liming has successively served as the manager of the company’s low-temperature products area and the head of Guangming Animal Husbandry. He is familiar with the company’s business and is expected to drive the development of the room temperature sector.
The company acquired milk shed food 66 at the end of 2018.
27% equity and 100% equity of Yimin Food Factory No. 1, after the acquisition, the integration of various sectors accelerated, and the synergy effect was obvious.
As soon as the synergistic products Mossian yogurt ice cream and ice cream flavored milk were launched, they quickly became popular on the Internet. We expect that the introduction of more fusion products in the future will effectively drive the company’s revenue growth.
Earnings forecast and rating: Maintain “Overweight” rating The company’s domestic dealers increased in the first half of the year, the overseas new Wright developed steadily, and the company increased by 1 in the second half.
500 million US dollars in marketing expenses and increased brand marketing are expected to contribute more incremental revenue to the company.
The new bright leaders brought new vitality to the company. After the acquisition of Milk Shed and Yimin Food Factory, the company’s new products continued, and the old trees did not line up new flowers.
We expect the company’s EPS for 2019-2021 to be 0.
39 yuan, 0.
443 yuan, 0.
50 yuan, according to the 2019 performance of 30 times the estimate, a year target price of 13 yuan, give the company “overweight” rating.
Risk reminders: food safety issues; increased competition in the industry; less-than-expected channel layout.