Zhongshun Jierou (002511): Net profit growth exceeds expected performance elasticity is now available

Zhongshun Jierou (002511): Net profit growth exceeds expected performance elasticity is now available

Event 1: Zhongshun Jierou released the first quarter report of 2019, and the company achieved revenue of 15 in Q1 2019.

410,000 yuan, an increase of 25 in ten years.

78%; net profit attributable to mothers1.

23 ppm, an increase of 25 in ten years.

18%, surpassing market expectations; net profit attributable to non-attributed mothers1.

22 ppm, an increase of 33 in ten years.

13%; basic profit return is 0.

0973 yuan / share.

Event 2: Zhongshun Jierou intends to repurchase part of the company’s shares in a centralized bidding transaction, which will be used as an employee stock ownership plan.

Repurchase funds budget 2?
400 million, the repurchase price does not exceed 13.

69 yuan / share, the number of repurchased shares does not exceed 2921.

80,000 shares, not less than 1460.


The turning point of raw materials is verified, and the cost flexibility is gradually reflected.

The company’s gross profit margin in Q1 2019 was 34.

01%, more than ten years 4.

83 points.

Affected by the decline in pulp prices and the ton-price increase from the previous month, the gross profit margin increased by 3 in Q1 2019.


However, in Q1 2019, the average price of coniferous / broadleaf pulp was 5033/5159 yuan / ton, down 16 from the previous month.

19% / 7.

59%, we think the pulp price will continue to decline in 2019, and the gross profit per ton of paper price will continue to improve.

Significant cost control benefits, and net profit margin increased sequentially.

In the first quarter of 2019, the company’s sales expenses, management expenses 淡水桑拿网 (including research and development expenses) and financial expenses accounted for 17 of the revenue.

24%, 5.

89% and 0.

38%, a decline of 3 per year.

73 points, 0

86pct and 0.

84 points.

The effective management and control of sales expenses indicates that the company’s channel expenditures have increased the improvement effect; if the equity incentive expenses are excluded, the management expense ratio has decreased by 1.

25pct; the decrease in financial expenses was mainly due to the reduction of interest expenses in the current period due to the repayment of corporate bonds in Q1 of 2018.

In terms of net profit margin, the company’s net profit margin in the first quarter of 2019 was 8.

01%, 0 years ago.

04pct, an increase of 2 from the previous month.

11pct, the logical turning point of the raw material turning point.

E-commerce channels continued to grow rapidly, and the proportion of high-end products continued to increase.

In Q1 2019, e-commerce and commercial sales increased by 50% each year, GT increased by nearly 12% each year, and KA increased by about 30%.The dealer channel has continued to expand. The company added 65 dealers in Q1 2019, covering 13 counties and cities over the end of 2018.

Due to the low base, 2019Q1Lotion increased by 100%, face increased by 45%, and natural wood increased by 35%, accounting for more than 65%. It is expected that the proportion of high gross profit products will increase by 10% each year.

The industry concentration is expected to increase, and the idea of leading high-end products will remain unchanged.

The tissue paper market size is nearly 100 billion yuan, and the market size growth rate from 2011 to 2016 is stable at 6.

More than 6%.

However, there are about 1,500 companies in the industry. The top four brands, Hengan / Vida / Jierou / Qingfeng, only account for about 35% of the market share, CR15 is about 60%, and there is room for penetration in the industry.

Bringing along with consumption upgrade factors, brand value is becoming increasingly important.

In addition, the high price of pulp has significantly increased the shortcomings of small and medium-sized production capacity. Due to the increasingly fierce competition for channel resources and end consumers, the cost pressure of small brands is not easy to change, which has led to the accelerated withdrawal of small and medium-sized production capacity, and the concentration of large factories has increased.

Zhongshun Jierou increased investment in research and development to build high-end products in the context of consumption upgrades, in order to achieve double growth in revenue and profits. The company’s research and development expenses in the first quarter of 2019 could reach 34.1 million yuan.

Equity incentive unlock conditions were fulfilled, and share repurchases showed confidence.

Following the launch of the first round of equity incentives in 2015, the performance targets have been well achieved.

The stock budget and budget stock incentive plan were announced for the first time in 2018. By binding the interests of employees and the company, they will increase employee motivation, aiming to impact revenue to $ 9 billion in 2021, and further seize the tissue paper market share.

Investment suggestion: We predict that the company will realize net profit attributable to mothers in 2019-2021.



20,000 yuan, an increase of 37 in ten years.

65%, 22.

05%, 19.

57%, corresponding to EPS.

43, 0.

52, 0.

63 yuan, maintain “Buy” rating.

Risk Warning: Channel Expansion Is Less Than Expected, Industry Competition Intensifies Risk, Raw Material Price Rise Risk