Dongfang Yuhong (002271) Company Research: Continuation of High Performance Increases in Accordance with Expected Profitability

Dongfang Yuhong (002271) Company Research: Continuation of High Performance Increases in Accordance with Expected Profitability

Event: The company released a report on 2019 results.

The company achieved operating income of 181 in 2019.

40,000 yuan, an increase of 29 in ten years.

1%, net profit attributable to mother 20.

90,000 yuan, an increase of 38 in ten years.

3%, with an expected average ROE of 23.


  Profitability has improved and performance growth is in line with expectations.

The company achieved a 29% increase in revenue in 2019. With the new real estate construction still unchanged, the company continued to expand the market and the development of large real estate customers. The market share maintained a rapid growth trend. It is expected that the direct sales and industrial drainage business will maintain rapid growthmomentum.
The company achieved a net profit margin of 11 in 2019.

5%, an increase of 0 compared with the same period last year.

76 goals, profitability has improved, and is expected to increase from gross profit margin (expected to increase significantly in the fourth quarter of 2019) and decline in sales and management expense ratio (while rapid growth in revenue, streamline sales and management staff);In addition, the rate of change has a significant 武汉夜网论坛 impact on the level of net interest rate: the growth rate in 2019 is more than 20%, which is about 3 percentage points higher than the 2018 yield, which is expected to be affected by the yield of the subsidiary.

  The third phase of large-scale equity incentives demonstrates the company’s confidence in development.

The company has completed the third phase of the equity incentive plan, covering 1792 people, which has significantly expanded the coverage compared with the previous two periods. The introduction of incentives helps the company to attract and retain middle management, core technology and business backbones, and enhance the work of the core team.Motivation stimulates team development.

Performance evaluation The average annual compound growth rate from 2020 to 2023 is not less than 20%. The integration of the evaluation 杭州桑拿 targets reflects the company’s confidence in future development and performance growth.

With reference to the first and second phases of the equity incentive plan, the company has completed its performance appraisal targets in 2013-2018.

  Investment advice: The company carried out strategic upgrades and organizational structure adjustments in the fourth quarter of 2018, and made relevant personnel adjustments accordingly. While continuing to strengthen its core competitive advantages, it sought a change of model while adjusting its business strategy to “stable operations and steady progress.”, Pursue the pursuit of sustainable, excellent and healthy development; Complete the third stage of balanced incentive compensation, covering a wide range of objects, which is conducive to motivating the team, performance evaluation target 2020-2023 net profit compound annual growth of 20%, highlighting the developmentconfidence.
At the same time, it is cultivating and building new business segments, striving to achieve the transformation from a “waterproof system service provider” to a “building and building material system service provider”, and a multi-category strategy is beginning to emerge.

We expect the company’s EPS to be 1 in 2019-2021.

4, 1.

8, 2.

2 yuan, the corresponding PE is 20 respectively.

4, 16.

2, 13.

0x; Maintain “Buy” rating.

  Risk reminders: Macro-scale policies and industry risks in the downstream real estate industry, raw material price fluctuation risks, market competition risks, and accounts receivable risks.