Xinbao shares (002705): rapid growth in domestic sales and exchanges boost profit

Xinbao shares (002705): rapid growth in domestic sales and exchanges boost profit

Performance summary: The company released the semi-annual report for 2019, reporting and realizing operating income of 40.

40,000 yuan, an increase of 7 in ten years.

4%; net profit attributable to mother 2.

4 ‰, an increase of 74% in ten years; the net profit of returning mothers after deductions has further increased by 48.

9%, non-recurring gains and losses are mainly due to the loss of fair value changes in forward foreign exchange contracts that the company has not yet settled in the same period last year.

60,000 yuan; Q2 single quarter revenue 21.

6 trillion, an increase of 11 in ten years.

2%; net profit attributable to mother 1.

50,000 yuan, an increase of 59 in ten years.

2%.

Domestic sales have grown rapidly, and independent brands have become new engines.

It is reported that the company has achieved positive results in the development of the 深圳桑拿网 domestic market. H1 in 2019 achieved domestic sales revenue7.

60,000 yuan, an increase of 28 in ten years.

9%, accounting for 18% of revenue.

8%, an increase of 3.
.

1pp.

With the rise of domestic ODM, the proportion of domestic sales revenue has further increased.

In recent years, the company has formed a multi-brand matrix of Dongling, Mofei, Lycra, etc., and carries out differentiated sales in different sales channels.

Taobao data shows that the 2019 H1 independent brand “Mofei” has successively launched explosive products, and its sales volume has increased by 355% and 390 each year, respectively.

3%.

The company also strengthened its cooperation with Internet companies, including Xiaomi, Mingchuang, Pinduoduo, etc., the scope of cooperation will be further expanded, and internal sales ODM orders are expected to accelerate growth.

Foreign exchange boosted profits, and export sales grew steadily.

In 2019H1, the company realized export sales revenue of 32.

80,000 yuan, an annual increase of 3.

4%, accounting for 81% of operating income.

2%; gross profit margin 32.

3%, an increase of 2 over the same period last year.

7pp.

Affected by fluctuations in the exchange rate of RMB against the US dollar, exchange loss losses in reported company financial expenses decreased by 6.47 million yuan in the same period last year; investment losses and fair value changes losses in forward foreign exchange contracts decreased by 29.11 million yuan in the same period of the previous year, effectively boostingThe growth of export profits.

Technological innovation drives profit improvement and automation builds efficiency.

According to the number of reports, the company continued to increase research investment for product innovation, and successfully realized the transformation from OEM to ODM. At present, the company’s product expansion has reached 12 major categories and more than 2,000 products.

H1’s R & D occupation is 1 in 2019.

5 ppm, an increase of 28 in ten years.

9%.

The company continues to strengthen its cost control capabilities throughout the value chain and reduce procurement costs.

Earnings forecasts and investment advice.

We expect the EPS for 2019-2021 to be 0.
85 yuan, 0.
92 yuan, 0.

99 yuan, maintain “Buy” rating.

Risk warning: the risk of falling demand in the international market, the risk of escalating trade disputes, and the risk of fluctuations in the prices of major raw materials.