Dongyi Risheng (002713): Sudden changes in the performance of the merger and acquisition subsidiary dragged down the overall performance of hardcover business

Dongyi Risheng (002713): Sudden changes in the performance of the merger and acquisition subsidiary dragged down the overall performance of hardcover business

Event: The company recently released its semi-annual report for 2019.

At the core of the report, the company achieved operating income18.

6 ppm, a ten-year increase of 3.

02%; net profit attributable to mother-6180.

790,000 yuan, a decrease of 663 per year.

34%, a win is a loss; the basic return is -0.

15 yuan / share, down 600 previously.


Comment: The construction business is stable, the regional market in North China is still growing rapidly, and East China has seen a decline in division of labor. The company’s construction business operating income.

32 ppm, a ten-year increase3.

99%, which is the main contribution segment of the company’s revenue, accounts for 87 of the total operating income.

56% (+0.


Operating income of the company’s design business in the first half of the year 1.

87 trillion, down 10 a year.

36%, accounting for 10 of total operating income.

05% (-1.

5pct), the design business income began to increase, and costs increased significantly.

From the perspective of regional distribution of income, North China and East China are the main sources of company’s operating income, and North China’s operating income is 6.

9.9 billion, accounting for 37% of total operating income.

52%, revenue increased 20 during the reporting period.

35%; operating income in East China is 6.

49 trillion, accounting for 34 of the total operating income.

82%, the income during the reporting period decreased by 2.

44%; South China, Northwest China, Central China, and Southwest China, as areas developed after the company, experienced divergent performance in the reporting period. South China and Northwest China continued to grow with revenues of 1.

15, 0.

81 increased by 3 respectively.

4%, 11.

54%, Central China and Southwest China began to decline, with income of 1.

79 and 0.

9.3 billion, down 17 a year.

63%, 20.

48%; the proportion of design business, the gross profit margin increased the company’s comprehensive gross profit margin during the reporting period 33.

38%, a sharp drop from the same period last year2.

66 grades, of which gross profit margin of construction and design business is 30.

21% and 51.

39%, which is decreased by 1 each year.

57 and 12.65 supplements, the decrease in design business income and the increase in gross profit margin are the beginning of the company’s reduction in gross profit margin.

The growth of Sumei Increasing and Loss and the target performance of mergers and acquisitions is gradually the first change in the first half of the performance. From a single quarter perspective, the company achieved operating income of 10 in Q2.

68 ppm, a decrease of 2 per year.


The net profit attributable to the parent company was 17.88 million, a significant drop of 75 previously.

52%; Sumei broke through 51 million in the first half of the year, an increase of 49% over the same period last year, and contributed growth and growth in the same period last year. Ai Design’s annual net profit fell by 35%; Xinyi Oriental replaced 45%, which is the company’s performance in the first half of this year.The initial fluctuations; the period’s expense rate rises; the company’s expense rate rises during the period, leading to an increase in the company’s costs.

Report totals, company period expenses 34.

49%, an increase of 2 over the same period last year.


The sales expense ratio increased by 1.

17 units; management expense ratio increased by 1.

04 per share; financial expense ratio increased by 0.

07 averages.

Net cash flow from operating activities.

34 ppm, a decrease of 4 per year.

74%, basically the same as last year.

A6 opened 8 new stores in the first half of the year, and the performance of the hardcover business soared to the end of the reporting period. The company ‘s traditional brand A6 stores have expanded to 171, and by the end of 2018, 163 new stores have opened 8 new stores, basically completing the nationwide business layout.

The company’s digital strategy continues to advance, applying Sass system big data technology and tools to achieve user-wide service, user portraits, demand analysis, and precise marketing promotion, bringing massive customer portrait resources to the business end. Through customer portraits, enhance customer information insight and improveCustomer-led conversion rates.

As of the reporting period, the company’s hardcover business experienced explosive growth. This 杭州桑拿网 report expects revenue of 26.65 million and a long-term growth of 149.


As the national market advances to the era of hardcover room delivery, in the future, precision workwear will become a new growth point in the home improvement market. Dongyi Risheng will deepen the development of fine decoration business, coupled with the company’s digital strategy, performance explosion may occur in the future.

Maintain “Buy” rating. We estimate the company’s operating income will be 45 from 2019-2021.

400 million, 52.

200 million, 58.

USD 900 million, an increase of 8 each year.

0%, 15.

0%, 12.

8%; net profit attributable to mothers is 2.

1.8 billion, 2.

5.3 billion, 2.

98 ppm, increasing by -13 each year.

7%, 15.

9%, 18.


It is expected that the EPS for 2019-2021 will be 0.

52 yuan / share, 0.

60 yuan / share and 0.

71 yuan / share, corresponding PE is 17/14 / 12x. In the short term, the company will face competition and competition pressure due to the increase in the proportion of fertilized and decorated houses and actual conversion.Home improvement, continuous product iteration, always leading the industry’s development direction, good cash flow, and large dividend payout ratio, the corresponding dividend payout ratio currently exceeds 4%, maintaining a “buy” rating.

Risks indicate the risk of overweighting the real estate budget; the risk of a sharp rise in the price of building materials; and the risk that business development will not meet expectations.

About the author