Jiansheng Group (603558) quarterly report comment: Q3 revenue of seamless underwear and cotton socks business achieved high growth

Jiansheng Group (603558) quarterly report comment: Q3 revenue of seamless underwear and cotton socks business achieved high growth

2019Q3 rapid growth in net profit in the first three quarters of 2019 The company achieved revenue / net profit attributable to mothers / net profit attributable to non-mothers13.

12/2.

28/2.

50,000 yuan, an increase of 14 in ten years.

64% / 31.

04% / 39.

92%.

Single-quarter revenue in Q3 2019 / net profit attributable to mothers / net profit attributable to non-mothers4.

85/0.

84/0.

86 ppm, an increase of 25 per year.

04% / 32.

65% / 51.

61%.

The growth rate of net profit in the first three quarters was higher than revenue growth mainly due to the improvement of product structure, the increase in the proportion of seamless underwear, the increase in gross profit margin, and the improvement of the company’s operating efficiency. The expense ratio during the period decreased by 1 compared with the same period last year.

42 pct, meanwhile, the proportion of overseas production capacity increased or decreased by one.

31 to 9.

87%.

Qiaoer Tingting’s performance continued to grow rapidly, and seamless underwear Vietnam ‘s productivity construction steadily advanced. 2019H1 seamless underwear revenue further increased by 27%, Q3 growth rate is estimated to be above 20%, it is expected to achieve non-recurring profit and loss net profit of 95 millionYuan ‘s performance promises that Vietnam ‘s Xing An plant is expected to gradually release capacity starting in 2020.

The cotton socks business benefited from a significant increase in customer orders. The completion of the relocation of the Hangzhou production base in 2019H1 Cotton socks business revenue was basically 深圳桑拿网 the same as the same period of the previous year. Due to the steady growth of large customer orders, especially from Uniqlo orders, it is estimated that Q3 cotton socks revenue growth rate exceeded 20%.
At the same time, the relocation of equipment at the Hangzhou production base has basically ended, and production capacity has returned to normal levels.

According to the company’s announced capacity plan, we expect the annual domestic production capacity of cotton socks to be 1.

About 500 million pairs, Vietnam’s production capacity will reach 1 in 2019-2020.

600 million pairs / 2.

100 million pairs.

The company ‘s Vietnam cotton socks and seamless underwear production capacity is gradually expanding to meet the needs of American customers, so the company is less affected by Sino-US trade friction.

The 19-21 results were 0.

64 yuan / share, 0.

74 yuan / share, 0.

85 yuan / share cotton socks and seamless underwear are in the period of capacity expansion, and the gradual release of future production capacity will bring performance growth.

Estimated 19/20 net profit is +28 respectively.

6% / + 15.

3%, currently corresponding to PE14.

0 times, PEG <1. Give the company 18 times PE for 19 years, corresponding to a reasonable value of 11. 52 yuan / share, maintain "Buy" rating. Risks indicate the risk of poor market demand, the risk of exchange rate changes, and less than expected risks in overseas capacity building.

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