Huida Sanitary Ware (603385): The completion of the sale of the coking plant is expected to be a good fourth quarter

Huida Sanitary Ware (603385): The completion of the sale of the coking plant is expected to be a good fourth quarter

Key points of investment: Successfully sell coking plant, withdraw funds to increase net profit.

The company will hold a 40% stake in Dafeng Coking for RMB 4814.

390,000 yuan was sold to Donghua Iron and Steel. Overall, Donghua Iron and Steel Dafa Coking paid the company a dividend payable to the company3.

520,000 yuan in total, Donghua Iron and Steel will pay 400 million yuan to the company.

At the same time, the company preliminary estimates that the sale of 苏州夜网论坛 Dafeng Coking is expected to increase the company’s net profit in 2019 by about 0.

5.4 billion.

  Successfully sold Dafeng Coking, focusing on its main business.

The company is a leader in conventional bathrooms. The successful sale of Dafeng Coking has helped the company focus on its main business and reduce management costs.

At the same time, Dafeng Coking is a coking coal chemical company. Due to the impact of the macroeconomic and industry cycles, the company’s performance after the successful sale of Dafeng Coking has reduced the risk of fluctuations in company performance.

  Create a national bathroom brand.

The company’s R & D center was completed and put into use on December 20, and the intelligent strategy will be further expanded in the future. At the same time, the company will become the official sponsor of the National Women’s Volleyball Team on December 1. We believe that the company is starting to fully develop its R & D and brand image.Create a national bathroom brand.
  Even without considering the sale of coking plants, the fourth quarter net profit growth rate is expected to turn upwards.

The company’s gross profit margin for the first three quarters of 2019 was 32.

92% in the first three quarters of 2018 every year 28.

07% gross profit margin increased by 4.

85 averages.

But since there were zero in the first three quarters of 18 years.

The net investment income of 7 billion yuan was -0 in the first three quarters of 19 years.

02 ppm, so the increase in gross profit margin was not reflected in the net profit margin, which was 10 in the first three quarters of 2019.

32%, compared with a net margin of 10 in the first three quarters of 2018.

08% did not increase significantly.

However, starting from the fourth quarter of 2018, the net return on investment in a single quarter was only zero.

02 ppm, an expansion and tie compared with the first three quarters of 18, so the net profit margin in the fourth quarter of 18 alone was 5.

61%.

In our opinion, the company’s gross profit margin improved in the first three quarters, at -0.

In the case of a net income of 2.0 billion yuan, the net interest rate for the first three quarters was 10.

32%. Therefore, even without considering the proceeds from the sale of coking plants, the growth rate of net profit in the fourth quarter of 2019 is expected to increase.

  Coupled with the benefit of the sale of Dafeng Coking, the company’s fourth-quarter performance improved even more beautifully.

If disclosed according to the company announcement, if the sale can increase the net profit in 2019 by about 0.

54 million, 130% of 4149 million net profit in the fourth quarter of 2018, so we expect the company’s net profit growth in the fourth quarter of 2019 will be more beautiful.

  Earnings and estimates.

Considering the sale of Dafeng Coking, we expect the company’s EPS for 2019-2021 to be 0.

90, 0.

95, 1.

15 yuan / share, since 2019 includes a one-time sale of profits and losses, so using the 2020 data to evaluate, the comparable listed company’s median PE forecast for 2020 is 16.

4 times, giving the company 15-18 times forecast PE in 2020, corresponding to a reasonable value range of 14 in 2020.

25-17.

10 yuan / share, “previous market” rating.  risk warning.

The intensification of trade frictions affects export risks, the risk of intensified exchange rate fluctuations, and the progress of entering the real estate centralized mining system is less than expected, and it brings the risk of price wars.