Depth-Company-CCB Research Group (002398): Water Reduction Business Still Strong, Future Growth Still Certainty

Depth * Company * Jianyan Research Group (002398): Water Reduction Business Is Still Strong and Growth Certainty Is Still High in the Future

The company released its 2019 Interim Report with revenue of 14 in the first half of the year.

810,000 yuan, an increase of 28.

31%; net profit attributable to mother 2.

0.6 billion, an increase of 76.

21%; EPS0.

30 yuan, the same increase of 76.


The company’s performance in the second quarter remained strong, with a huge contribution from water reducers, and the growth of the testing business in the first half of the year also picked up.

Key points of the support level The second quarter results are better, the cost and expense ratio have been significantly reduced, and the cash flow has improved: the company’s second quarter performance reached a new high, and the second quarter revenue was 8.

7.5 billion, an increase of 25.

06%, net profit attributable to mother 1.

1.7 billion yuan, an increase of 67.

45%, even the growth rate has improved, still exceeding market expectations.

The company’s gross profit margin increased by 5 in the first half of the year.

49pct, each expense rate is reduced by 0.

62 points, a great contribution to profit growth.

The company’s operating cash flow in the second quarter 1.

US $ 5.7 billion, a significant supplement to operating cash expenditures in the first quarter1.

In the case of 17 trillion, the total operating cash flow in the first half of the year was 0.

410,000 yuan, an increase of 10% in ten years.

In the first half of the year, the company’s cash ratio increased, the account receivable turnover rate remained stable, and the impedance rate rose slightly.

The strong water-reducing business contributed a lot to performance, and the growth rate of inspection has picked 淡水桑拿网 up: the revenue of the water-reducing agent business in the first half of the year.

2.7 billion, an increase of 26.

03%, gross profit 3.

21 trillion, with an increase of 74.

74% is the main contribution of the company’s performance growth.

We believe that the initial increase in the gross profit margin of the water reducer may be due to the decline in the price of crude oil from the end of 2018 to the decline in the price of petrochemical related products to the first half of 2019.

The growth rate of the inspection business has picked up, which has contributed to the improvement of the company’s cash flow.

Industry concentration and total demand are still the growth logic, and the future growth continues to be highly certain: the increase in the concentration of the water reducer industry and the maintenance of 深圳桑拿网 building construction needs remain the most important logic of the company’s water reducer.

In the future, the company will mainly expand its production capacity in strong areas such as Zhejiang and Chongqing. Against the background of increasing industry concentration, the company’s water reducing agent business will continue to grow with high certainty in the next three years.

It is estimated that considering the company’s future growth expectations, we slightly increase our performance expectations. It is expected that the company’s revenue will be 33 in 2019-2021.

37, 41.

24, 52.

8.5 billion; net profit attributable to mothers is 3.

83, 4.

46, 5.

54 ppm; EPS is 0.

552, 0.645, 0.

800 yuan, (Originally predicted: 0.

500, 0.

604, 0.

652 yuan), maintain the company’s buy rating.

The main risks faced by the rating are that new production capacity has fallen short of expectations, demand for housing and construction has decreased, and raw material costs have changed.

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