Tianrun Dairy (600419): Actively lay out external market reforms in upstream regions to meet opportunities
Event: The company’s 2019H1 achieved operating income8.
23 ppm, an increase of 13 in ten years.
52%; net profit attributable to mother, 7,756.
330,000 yuan, an increase of 11 in ten years.
Among them Q2 realized operating income4.
$ 7.5 billion, an annual increase of 11.
79%, net profit attributable to mother is 4664.
230,000 yuan, an increase of 12 in ten years.
The region achieved rapid growth and the regional external market was adjusted vertically. In the first half of this year, the company adjusted and formed the management framework of the five major marketing centers in northern, southern, northern, eastern, and southern China.Make layout adjustments to achieve vertical management and refined marketing.
For the key promotion categories, an independent milk beer department was set up for professional operations.
With the deepening of the reform, the Xinjiang market achieved rapid growth, and the Xinjiang market achieved sales revenue in the first half of the year.
The 31 ppm, 10% + growth boosted double-digit sales growth for two consecutive quarters.
Realizing sales income in the extra-territorial market 2.
USD 8.9 billion, the growth 杭州夜生活网 rate of the extraterritorial market slowed down every year, mainly due to the impact of the adjustment of the marketing organization structure in the first half of the extraterritorial market.
Costs rose, and gross profit margin remained stable. In the first half of this year, the price of raw milk showed an upward trend, and the company’s raw milk cost increased by about 5%.
However, the company’s gross profit margin remained stable or related to the improvement of product structure.
2019H1 company gross profit margin 27.
44%, basically the same as the same period last year, a slight increase of 0 compared to 2018.
At the same time, the listing of new products also contributed to the increase in gross profit margin.
In 2019H1, the company launched more than ten new products such as “Apple yoghurt” yogurt, charcoal-burning glass bottle yogurt, Huayan Qiaoyu milk, etc. The market response is better.
Expense rate during the company’s 2019Q2 period was 13.
63%, a decrease of 0 compared with the same period last year.
43 units, down 1 from the previous month.
The total of 45 is mainly the sales expense ratio from 11 in 2019Q1.
03% dropped to 10.
05%, the management expense rate is 3 from 2019Q1.
97% dropped to 3.
Layout upstream to ensure the supply of raw milk in the first half of 2019, the company achieved sales of dairy products9.
33 Initially, an increase of 16 over the same period last year.
At present, the company has 60% of its own milk sources. In the first half of 2019, the company optimized its organizational structure and steadily promoted the construction and operation of pastures. As of the end of June 2019, the company had 16 large-scale dairy farms and about 2 large-scale dairy cows.
310,000 heads, producing high-quality fresh milk5.
In July this year, the company completed the acquisition of Xinjiang Tianrun Behuotai dairy farming equity. Recently, the company carried out a cash increase of 70 million yuan, and the company further went upstream as a source of milk. Earnings forecast The company announced the preliminary rights issue financing plan, and the scale of funds to be raised does not exceed 4.
US $ 5 billion, after deducting the issuance expenses, will be used for a 40-ton-daily milk beer transformation project, a 3,000 large-scale dairy demonstration farm construction project, supplementary working capital, and repayment of bank loans.
The funding may be completed in the second half of this year, showing the company’s strategic thinking of pushing milk beer to the whole country.
We are optimistic about the long-term growth capabilities brought about by the company’s expansion outside the territory, and the further increase in the territory’s internal market leader. We predict that the company’s operating income will increase by 15 in 2019.
5%, net profit attributable to mother increased 16.
83%, achieving EPS 0.
64 yuan, corresponding to an estimated 22 times.
Given a 28x target estimate, the target price is 17.
92 yuan, giving an overweight rating.
Risks indicate that the price of raw materials has increased significantly, the external development of the company’s territory has fallen short of expectations, major defects in the company’s management, and food safety accidents have occurred.