Zhongshun Jierou (002511) Company dynamic comment: Daily necessities continue to lead the company Zero data Jierou stable value highlights
The zero-data daily necessities performed strongly, and the value of mandatory consumption layout was prominent.
Retail data released in April 2019. Daily necessities +12.
6%, ranking first in all industries, maintaining double-digit growth, showing the expected consumption potential.
Under the environment of increasing trade frictions and increasing downward pressure on the economy, Jierou is more stable as a mandatory consumer sector benchmark.
The company’s Q1 revenue achieved high growth, which is the basis for long-term performance growth.
From the follow-up point of view, the improvement of the profit margin brought about by the decline and increase in pulp prices began to gradually manifest in 4 months, and the profit is expected to improve quarter by quarter.
In the long 重庆耍耍网 run, the company’s layout of a care category will open the ceiling for long-term growth.
High demand for wood pulp port inventory is weak. At present, there is no need to worry too much about the previous market cost.
China’s wood pulp imports account for about 33 of the world’s total wood pulp trade.
21% has a significant impact on the wood pulp market.
At present, from 2015 to 2016, China ‘s weak demand side is weaker than improving the decline in wood pulp prices. At the same time, the exchange rate is converted into a decreasing value cycle. Under the indicator that supply exceeds demand, the exchange rate is gradually returning to wood pulp.
We believe that the current port inventory is maintained at a high level, and demand is permanently uncertain and rebounded. Wood pulp prices may be self-adjusted against the depreciation of the RMB, and the company’s overall cost improvement space is limited.
The company has no plan to purchase wood pulp from the United States in 2019.
In August 2018, China announced the second batch of tariffs on about 60 billion U.S. imports of the United States. The tariff on wood pulp increased from 0% to 5%. In the latest list announced in May 2019, wood pulp remained at 5%.Import duties.
Affected by trade frictions, the company has actively made adjustments. At present, the company has not imported wood pulp from the United States. The company’s wood pulp imports mainly come from: Finland, Canada, Sweden, Chile, Russia, Brazil, Indonesia, Uruguay and other ten countries.
From the perspective of the industry, the United States is not the main source of wood pulp never imported. In 2017, wood pulp mainly came from Brazil (22.
88%), Canada (18.
65%), Indonesia (13.
69%), Chile (9.
78%), there is room for expansion and avoidance of wood pulp procurement.
Investment suggestion: The company’s Q1 performance is beautiful. For the basis of continuous growth, mandatory consumer products show gradual value.
Q1 is the inflection point in costs. The improvement of the company’s profitability improves with the reduction of wood pulp, and the company’s profitability gradually increases to release its elasticity under the catalyst of increasing downward adjustments.
The company is the most growing brand of tissue paper company. The breadth of channels, the space for deep expansion and improvement, the steady delivery of new products and the continuous launch of new products, the company’s market share continues to increase.
The company’s EPS for 2019-2020 is predicted to be 0.
51 yuan, corresponding to PE is 24X, 19X, maintain “highly recommended” level.
Risk reminders: the risk of rising raw material prices; less-than-expected capacity release; industry capacity expansion exceeds demand and increased competition; less-than-expected expansion of product expansion categories; and less-than-expected marketing channel construction.