Depth * Company * Dongfang Yuhong (002271): Receivables collect cash to improve, streamline personnel, reduce costs and increase efficiency

The company released its 2018 annual report with an interim revenue of 140.

4.5 billion, an increase of 36.

46%; net profit attributable to mother 15.

08 million yuan, an increase of 21.

74%; EPS1.

01 yuan, with the same increase of 21.

69%.

For seven consecutive years, profits have maintained a medium and high speed growth, and the company is indeed a rare white horse.

Key points supporting the rating The stable profit margin improved, and the cash flow improved significantly: the company’s revenue growth rate maintained.

46%, but the profit growth speeds up and improves, the decrease is the decrease in gross profit margin3.

14pct, due to the increase in company revenue.

The company’s operating cash flow improved significantly to 杭州夜网 10.

14 ppm; annual capital expenditure increased by 8.

7.9 billion to 16.

4.3 billion.

The overall yield has improved, but it is within the controllable range.

The collection of collections was strengthened, and the competitive advantage was further strengthened: the company enhanced its bargaining power for upstream collective procurement and extended the account period; and adopted ABN and non-recovery factoring to accelerate the collection of downstream payments, which significantly improved cash flow.

If we consider the financing cash flow of factoring repayment, the company’s actual operating cash flow exceeds 2 billion.

The current competition in the waterproofing market is becoming fierce, and there are constantly new entrants.

The company improved the ability to collect funds, further considered the 南京夜网论坛 market share and cash quality, and strengthened the industry’s internal competitive advantage.

The gross profit margin is likely to rise, and the streamlining of the bank is effective. The company has gradually improved its gross profit margin. The reorganization is an increase in the proportion of low-value mortars. It is only the increase in crude oil prices in 2018 when the price of petroleum increased.

With the company’s initial completion of downstream price increases, and the decline in oil prices from the fourth quarter of 2018, the company’s high-probability gross profit margin will rebound in 2019.

In 2018, the company streamlined its personnel, significantly reduced management costs, and effectively reduced costs.

The industry leader is expected to continue to benefit from the continued start-up beyond expectations: The 2018-2019 new start-up continues to exceed expectations, and the company’s performance as a leader in the waterproof industry continues to be released, promoting further benefits.

It is estimated that the company’s fundamental conditions are better than expected, and the profit forecast is slightly adjusted. It is expected that the company’s revenue will be 172 in 2019-2021.

90, 208.

68, 240.

7.6 billion; net profit attributable to mothers was 20.

77, 25.

63, 30.

3.7 billion; EPS is 1.

39, 1.

72, 2.

04, maintain the company’s overweight rating.

The main risk facing the rating is that the company’s production capacity is too high, and competition in the waterproofing industry has further intensified, affecting market share.