Shun Xin Agriculture (000860) 2019 Interim Report Review: Performance Meets Expectations Bullish on Long-term Growth of Niulanshan
Event: Shun Xin Agriculture released its 2019 interim report, reporting that the combined company achieved operating income84.16 ppm, an increase of 16 in ten years.36%; net profit attributable to mother 6.48 ppm, a 34-year increase of 34.64%; gross margin is 36.82%, a decrease of 2 over the same period last year.93 averages; net margin is 7.75%, an increase of 5.14 units. Opinion performance compounded expectations, and advance receipts remained high.In the first half of the year, the company’s operating income and net profit increased by 16 each year.36%, 36.82%; operating income and net profit in the second quarter alone increased by 11 each year.99%, 89.95%, rapid revenue growth but significant improvement in net profit; advance receipts 49.55 ppm, an increase of 44 in ten years.00%, maintaining a high level. The growth rate of Beijing market performance is dazzling, and the foreign port market is advancing steadily.By region, the Beijing market realized operating income of 39.51 ppm, an increase of 36 in ten years.11%; and the overseas market realized operating income of 44.46 ppm, a 10-year increase2.32%, the spread of nationalization is steadily advancing.We believe that the main reasons for the fastest growth in the performance of the external port market are: 1) The high growth of the external port market performance in the same period last year led to a high base (the same period last year).460,000 yuan, an increase of 71 in ten years.(31%); 2) The company transformed from national expansion to market in-depth development through “deep distribution”. The brand recognition of Niulanshan in the foreign market is lower than Beijing; The long-term growth potential of Niulanshan remains strong.In 杭州夜网论坛 the short term, the company accelerates the three major changes of “deep distribution, structure adjustment, and tree model”, and its performance growth is more stable. In the long run, the low-end wine market is close to 200 billion yuan, and CR3 is only 12%.National brands, high cost-effective products, and strong channel profits further increase market share. The meat business decreased slightly, and real estate accelerated destocking.19H1 Meat business (slaughter + breeding pig)3.6 billion, with a slight budget expected; revenue from land operations recognized2.30,000 yuan, accelerate the destocking. We maintain the company’s “overweight” rating. We expect the company’s operating income for 2019-2021 to be 146.17, 170.46, 192.7.3 billion; net profit attributable to shareholders of the parent company was 11.47, 16.38, 20.7.合肥夜网9 billion; corresponding PE is 34.78, 24.35, 19.19 times.Taking into account the company’s brand power, product power, and channel power, we are optimistic that Niulanshan will continue to increase its market share in the low-end light bottle wine market and maintain the “overweight” rating. Risk reminders: macroeconomic downside risks, food safety risks, external channel development risks.