Yuen Long Yatu (002878) 2019 Third Quarterly Report Review-Performance Growth Is Less Than Expected Cash Flow Pressure

The first three quarters of 2019’s revenue / attribution net profit is 10.

28 ppm / 82.05 million yuan, +51 for ten years.

5% / + 21.


It is inferred that the consolidation of the Qianma network has an endogenous revenue / net profit of at least +22.

5% /-3.

3%, revenue growth in line with expectations, performance growth exceeded 杭州桑拿 expectations.

The gross profit of the main business of promotion extended to weaker-than-expected new customer development, lowered its profit forecast and maintained the “overweight” level.

Revenue growth was in line with expectations, and performance growth exceeded expectations.

The company achieved revenue of 10 in the first three quarters of 2019.

2.8 billion, an annual increase of 51.


Benefiting from the company’s funding and customer resource support, Qianma’s network business has grown rapidly, contributing revenue in the first three quarters1.

9.6 billion.

Excluding the impact of Qianma’s consolidation, the company’s endogenous revenue has achieved 8.

3.2 billion, +22 a year.

5%, mainly aimed at the core customers of gifts and digital promotions business expansion and promotion (the top three customers in the first three quarters achieved 5 revenue.

400,000 yuan, +23 a year.


In terms of business, we expect revenue from gift retail / promotion services / franchise retail business in the first three quarters6.

8.6 billion / 1.

03 billion / 1.

9.7 billion, accounting for 66 of the main business.

7% / 10.

1% / 19.


In the first three quarters of 2019, the company’s net profit attributable to its parent was 82.05 million yuan, +21 a year.


Citing Qianma’s 1674 million net profit consolidation, the endogenous net profit of the mother is 6,530 million, each time -3.


19Q3 company achieved revenue in a single quarter 3.

500 million, +48 a year.

9%, net profit attributable to mother is 22.36 million yuan, +19 per year.


Instead of consolidating Qianma’s 7.11 million yuan net profit consolidation, Q3’s endogenous return to mother’s net profit was only 15.25 million yuan, each time -18.

7%, performance growth was lower than expected.

The gross profit margin of the main business of the promotion dragged down the net profit margin.

The company’s consolidated gross profit margin for the first three quarters of 2019 was 22.96% a year -1.

94, of which 19Q3 comprehensive gross profit margin -0.

3pct is about 22.

47%, mainly due to the decrease in the gross profit margin of the gift and gift business: The reduction was due to the conversion of the point exchange business and the conversion of the gross profit margin of branded products purchased by financial customers to the strong premium capabilities of core customers such as Huawei and Wyeth and fierce competition from suppliers, leading to the company ‘sProfit margins have been squeezed.

In terms of expenses, thanks to refined management, the total expense ratio in the first three quarters was changed to -0.

86pct to 12.

6%, of which the sales / management / financial expense ratio is 6.

1% / 6.

1% / 0.

5%, year -1.

2 / -0.

2 / + 0.


Affected by the decline in the gross profit margin of the gifts and gifts business, the net profit margin in the first three quarters of 2019 decreased by -0.

99 points to 9.


Operating cash flow is still under pressure, but the risks are manageable.

In the first three quarters of 2019, the company’s net operating cash flow was -968.

80,000 yuan, at least -0.

1.3 billion US dollars, mainly dragged down by three aspects: 1) The company’s 19 years of rapid business expansion, the payment to suppliers increased, so the purchase of goods, accepting labor service cash + 44% to 4.

8.8 billion yuan; 2) Increase in stocking due to business expansion, the company’s inventory / prepayments in the first three quarters were + 273% / + 79% respectively; 3) Due to the impact of new financial customer development and Qianma merger, the company expanded personnel replacement ordersEmployees are paid and bonuses increase by +47 per year.

2% to 7.89 million.

However, the company’s current ratio is two.

03. There was too much credit line. At the end of Q3 quarter, it was increased by RMB 85.55 million and shortened.

6.3 billion, no short-term liquidity.

At the end of the Q3 quarter, the company’s account receivables reached 4.

6.1 billion, the operating cash flow is expected to improve after the subsequent recovery.

Risk factors: fluctuations in the business of major customers; the performance of Qianma Network falls short of expectations; shareholders’ short-term concentrated holdings.

Profit forecast and rating.

Due to the decline in the gross profit margin of the main promotion business, which has dragged down earnings growth, and the weaker-than-expected development of new customers in the second half of the year, we lower our 2019-2021 net profit forecast to 1.

2.6 billion / 1.

6.5 billion / 2.

08,000 yuan, corresponding to EPS forecast of 0.



59 yuan (previous forecast 1).



63 yuan), to maintain the “overweight” level, the current priority is 24.

45 yuan, corresponding to 25X PE in 2019.