Zhejiang Longsheng (600352): Interim report meets expectations Intermediate price increase drives performance improvement

Zhejiang Longsheng (600352): Interim report meets expectations Intermediate price increase drives performance improvement

2019H1 net profit increased by 36% each year, in line with market expectations. Zhejiang Longsheng released its 2019 Interim Report, and the company achieved revenue of 96.

500 million, an increase of 5 in five years.

3%, net profit 25.

300 million (excluding non-net profit of 20.

500 million), an increase of 36 in ten years.

2% (after deducting non-tax increase of 13 years.

1%), the performance was in line with expectations.

Based on the latest equity calculation, the corresponding EPS is 0.

79 yuan.

Among them, the revenue of 2019Q2 was 48.

800 million (+1 year on year.

2%), net profit of 12.

700 million (+ 17% year-on-year.


We expect the company’s EPS to be 1 in 19-21.



36 yuan, maintain “Buy” rating.

The intermediate price increase led to the foundation of the performance improvement report. The company’s average sales price rose by 36% to 4.

260,000 yuan / ton, every 5% to 5 sales.

6 nominal, corresponding to revenue 23.

80,000 yuan (+ 30% year-on-year), the business gross margin rose by 0 every day.

6pct to 48.

At 4%, Hongsheng Chemical (resorcinol) / Zhejiang Anuofang Amine (m-phenylenediamine) achieved net profit of 7 respectively.

2.4 billion (+ 11% year-on-year) / 1.

2.6 billion (+ 40% year-on-year), driving the company’s performance to improve.

At present, the price of intermediates still remains strong. According to Baichuan Information, the latest offer for resorcinol is 11.

40,000 yuan / ton, a slight increase of 4% from the peak in early May.

The relocation of the factory affects profitability. The dye market outlook is expected to pick up. The average sales price of the company’s dye 19H1 has increased by 19% to 5 in the past.

3 million / ton, due to the relocation of the production capacity of the Daoxiu plant area to the Shangyu Development Zone (new production capacity has begun production), sales fell by 12% to 10.

1 nominal, corresponding to revenue 53.

600 million (YoY + 5%), Longsheng Dyeing / Kehua Dyeing net profit is 2.


51 ppm (YoY -32% /-21%); overseas, Huasheng limited net profit increased by 7% to 7 in ten years.

25 trillion, due to the increase in accrual of integration costs, Dystar Holdings’ net profit replaced 33 million (2018H1 was 2.

4.1 billion).

Since Q2, the price of dyes has fallen sharply. According to Zhuochuang Information, the latest price of dispersed black ECT300% / active black WNN is 38/30 yuan / kg, which has dropped 17% / 9% from the high point in early May. Currently, the absolute inventory of manufacturers is at a low levelWith the expected easing of trade frictions and the gradual restart of downstream procurement, dye prices are expected to pick up again.
佛山桑拿网 Government grants and non-recurring gains from changes in fair value 19H1 The company realized investment income2.
660,000 yuan (+ 100% year-on-year), during which the rate of expenses fell to 0 in ten years.

1 point to 18.

5%, of which the increase in the cost of Dystar’s restructuring led to an increase in management expense ratio of 0.

5 points to 6.

2%; As a result of the reduction in exchange losses, the financial expense ratio has dropped to 0.

5 points to 1.


The company’s non-recurring income amount is 4.

80,000 yuan (0 for the same period last year.

500 million), including government subsidies 3.

2 ppm (mainly compensation for relocation). In total, the changes in the fair value of financial assets held by the company generate income.

500 million.

Real estate projects are progressing 杭州桑拿 steadily. At present, the company’s real estate projects are progressing smoothly. The Huaxing New Town project has obtained approval from Shanghai Jingan District and is gradually optimizing the overall design plan. The Datong base project progresses in an orderly manner and will begin pre-sale next year. Huangshan Road Project 1The company will enter the closing group during the period, and the company is expected to pay the house and confirm the income by the end of the year.

Maintain “Buy” rating. We maintain our profit forecast of USD 65/72/77 million for 2019-2021, corresponding to EPS of 1.



36 yuan, based on the comparable company’s estimated level (average 10 times PE in 2019), giving the company 9-11 times PE in 2019, corresponding to a target price of 17.


89 yuan (original value 19).


88 yuan), maintain “Buy” rating.

Risk reminder: downstream demand fails to meet expected risks, and environmental protection policy implementation fails to meet expected risks