China Torch High-tech (600872) Annual Report Commentary Report: In 2018, it is still expected that efficiency gains from controlling fees will still be expected

China Torch High-tech (600872) Annual Report Commentary Report: In 2018, it is still expected that efficiency gains from controlling fees will still be expected

Event: The company released its 2018 annual report with 41 years of revenue 41.

66 ppm, an increase of 15 in ten years.

43%; net profit attributable to mother 6.

07 million yuan, an increase of 34 in ten years.


Single Q4 company revenue 10.

20,000 yuan, +13 for ten years.

8%; net profit attributable to mother 1.

22 ppm, an increase of 23 in ten years.


The main business is delicious and stable, and cost control and efficiency 武汉夜生活网 increase contribute to high growth performance.

Delicious fresh primary revenue 38.

52 trillion, ten years +10.

34%; net profit attributable to mother 6.

36 trillion, ten years +12.

35%; single Q4 revenue 9.

32 trillion, ten years +10.

4%; net profit attributable to mother 1.

80 ppm, +52 a year.


There are three reasons for the increase in Q4 performance: 1) the delay in the issuance of Typhoon Q3 and the low base of Q4 in 2017; 2) the gross profit margin of Q4 increased to 39.

3%, an increase of 2 compared with 2018Q3.

2 pct, at least 2017Q4 increased by 1.

8 pct, the cost pressure of packaging materials is expected to decrease in the fourth quarter, and production efficiency will increase;

6%, down 0 from the Q3 2018.

8 pct, a decrease of at least 2017Q4 by 2.

6 pct.

Overall, the company’s condiment business has developed steadily, with improved production efficiency and effective cost control. This year, the market has decreased, management costs have decreased significantly, and performance growth has outpaced revenue growth.

The ton price of soy sauce continued to rise, and the growth rate of oyster sauce and cooking wine was eye-catching.

In terms of categories, soy sauce income increased by +10 in 2018.

3%, revenue accounted for 67.

8% (68% in 2017), the company’s soy sauce ton price increases by 2 every year.

3% to 6443.

05 yuan / ton, product structure continued to optimize.

In addition, the company disclosed in detail the growth of various sub-categories for the first time in 2018. The volume and price of oyster sauce for fishermen rose, and the sales volume increased by 38.

7%, with revenue growing 41 per year.

8%; cooking wine sales increase by 75 per year.

1%, income grows by 68 per year.9%.

The company focuses on the strategic transformation of the oyster sauce category. In the future, the release of oyster sauce production capacity at the Yangxi Kitchen State Base will further contribute to performance growth.

Real estate business increased performance.

The company’s real estate business accelerated its recognition in the second half of the year, and Zhonghui Hechuang initially achieved zero revenue.

88 ppm, a five-year increase of 5.

7 times; net profit attributable to mother 0.

24 ppm, a 10-year increase2.

8 times; gross profit margin of real estate business 34.

8%, an increase of 22 per year.

3 pct.

In the first half of 2019, there were about 1.

80,000 square meters of residential buildings opened.

Outlook for 2019: In 2019, the Yangxi base is expected to increase production capacity by 10 tons + the pressure on upstream costs will ease. It is expected that the soy sauce business will maintain double growth and the gross profit level will increase.

Leadership change has been finalized, the incentive mechanism can be improved, and cost control and efficiency increase continue to contribute to performance growth.

Investment suggestion: It is estimated that the net profit attributable to the mother in 2019/20/21 will be 8 respectively.



49 ppm, an increase of 40 in ten years.

6% / 25.

8% / 16.

2%, the current market value corresponds to PE 34.



3x, maintain “Buy” rating.

Risk reminders: macroeconomic downturn, changes in raw material costs, fierce industry competition, food safety issues, and high uncertainty in actual business