Kingboard pays attention to attracting, and the economy will be good next year

The stock price of China Eastern Group (00581), a mainland steel stock that was reviewed last week, is quite volatile, but it also reflects that its potential returns are also considerable

When investing in this stock, you should pay attention to the timing of shipments and stocks. Available.

Goldman Sachs and Big Mortgage both agree on the global economic performance next year. Kingboard Group (00148), which is more sensitive to economic cycles, may benefit from a mild global economic recovery next year, coupled with cheap valuations and high dividend yields. Low absorption option.

Cheap valuation, high dividend yield

The revenue of Kingboard Group in the first half of the year was 18.246 billion yuan, a year-on-year decrease of 18%, and net profit fell by 65.4% to 1.442 billion yuan. Excluding the annual sales of subsidiaries, the decline in basic net profit narrowed to 44.5%. During the period under review, the Sino-U.S. Trade dispute did not cool down, which continued to affect the demand of the electronics industry, and caused the copper-clad panel sector to face a more competitive market environment. The printed circuit board division benefited from the increase in the share of communication network equipment orders, which could offset the impact of the decline in market demand. At the same time, as the economic growth slows down, the consumption of bulk chemical products has also fallen, and the prices of chemical products have fallen.

Facing complex market challenges, the Group actively expanded sales channels through coordinated development of upstream and downstream, and each core department has continued to contribute to profitability. However, because the market was in short supply during the same period last year, the unit price of product sales rose, and the gap between supply and demand narrowed in the first half of this year. Under the high base factor, the unit price of some products decreased year-on-year, which caused business performance to decline.

Kingboard’s copper-clad panel business has steadily ranked first in the global copper-clad panel market for 14 consecutive years. During the period under review, shipments of the copper-clad panel segment were similar to last year. However, market demand declined, and product prices needed to be adjusted accordingly. As a result, departmental revenue fell by 21%, and earnings before interest, taxes, depreciation and amortization (EBITDA) fell by 43% to 1.278 billion yuan.

As for the printed circuit board business, with the advancement of the 5G communication network, it has brought a considerable increase to the department’s high-end circuit board orders. The department continued to increase the linkage with the industry’s leading customers and achieved satisfactory results. In response to market changes, rapid product mix upgrade was promoted to maintain stable product shipments. During the period, the turnover of the printed circuit board division decreased slightly by 3%, and EBITDA profit increased by 3% to 560 million yuan.

In terms of the chemical business, the salt brine chemical base in Hengyang, Hunan Province successfully added a caustic soda production line, and added epichlorohydrin production capacity. However, after the economic slowdown, the demand for chemical products weakened, and the prices of major products in the chemical sector fell year-on-year. Therefore, the turnover of the chemical sector fell by 25%, and EBITDA’s profit fell by 54% to 705 million yuan.

Income from property development is ideal

The real estate department launched residential projects as planned, and promoted commercial property leasing. Due to the decrease in the number of units completed and delivered during the period, the turnover of property sales dropped to 341 million yuan. With the end of the rent-free period and the leasing rate increased, rental income rose to 555 million yuan. The overall turnover of the real estate sector decreased by 18% to 986 million yuan.

Citi released a report after Kingboard announced that it has achieved 2 billion yuan in property development income in the second half of the year, much higher than the 341 million yuan in the first half of the year. Profit of RMB 100 million. Maintain “Buy” rating.

The bank estimates that the gross profit of Kingboard Chemical’s and upstream materials business will be worse than expected, lowering its profit forecast for 2019 to 2021, and lowering its target price to 26 yuan.

Significant improvement in technical trends

Last week, a Citi report pointed out that after the recent increase in product prices of the Kingboard Group, the company’s copper-clad panel and printed circuit board business gross margins were better than expected. The bank raised its target price by nearly 8%, from 26 yuan to 28 yuan, maintaining the “Buy” rating.

Kingboard ’s recent technical trend has clearly improved. It seems that it is currently making a flag. If it breaks 22.8 yuan, it can be injected first. After confirming that the stock market has resumed its rising wave, it can continue to pay attention to speculation and speculate on the economic recovery next year.


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