Huida Sanitary Ware (603385) Company Review: The successful sale of the stock company Dafeng Coking has long-term growth logic becoming clearer

Huida Sanitary Ware (603385) Company Review: The successful sale of the stock company Dafeng Coking has long-term growth logic becoming clearer

Event: The company and Tangshan Shandong Iron and Steel Enterprise Group Co., Ltd. merged the “Equity Transfer Agreement”, and the company held 40% of Dafeng Coking Co., Ltd. for RMB 48,143,867.

The price of 46 yuan was transferred to Donghua Iron and Steel, which translates into the fact that Donghua Iron & Steel paid Dafeng Coking on behalf of Dafeng Coking to 351,856,132.

54 yuan in total, Donghua Iron & Steel has to pay the company RMB4.

One million yuan.

The company’s air force has received the first dividend from Dafeng Coking1.

68 trillion, a total of 5 were received after the transaction was completed.

68 million in cash, which is expected to increase the company’s net profit in 2019 by about 0.

5.4 billion.

  The sale of Dafeng Coking will help the company focus on the main business, and at the same time restart the funds to support the development of the main business.

The sale of a 40% stake in Dafeng Coking will help the company focus on the main business of sanitary ware, improve operating efficiency, reduce management costs, and also reduce the risk of fluctuations in the company’s performance. At the same time, the company will gradually acquire 5.

The 6.8 billion yuan fund can be expected to support the construction of Chongqing production bases in the future.

  After implying the impact of Dafeng Coking, the company’s main business performance growth rate in the first three quarters reached 57.


Dafeng Coking’s performance broke through, and finally contributed net profit of 58 million yuan. In the first three quarters of this year, it contributed net profit of -13 million yuan. However, through the rapid development of the main bathroom industry, the company expanded new channels, strengthened refined management, and made the main bathroom industry.Achieved rapid growth in net profit, and the main business performance in the first three quarters increased by 57 per year.

89%, of which the main industry performance growth in the third quarter increased by 58.


  The company’s future investment logic: 1) The rapid growth of the beneficiary decoration project.

The company began to focus on the engineering side in 18 years, and gradually expanded new customers. While maintaining cooperation with head developers such as Country Garden, Poly and Vanke, it also signed strategies with Longhu, China Shipping, Ocean Shipping, COFCO and other real estate developers.Cooperation agreement.

In the future, refined decoration houses will sink to the third and fourth lines, and it is expected that the purchase rate of domestic bathroom brands will also increase.

The engineering business is generally retailed according to a high degree of standardization, standardized budgets, and profitability levels.

2) The retail side strengthens channel optimization, product upgrades, and gradually exerts its strength.

After the company went public, it strengthened the construction of its retail dealer team, marketing efforts, product design, and function upgrades, and increased the research and development of smart bathrooms. This year ‘s retail revenue has also picked up quarter by quarter. There are currently more than 2,800 stores and channels have plenty of room for sinking.

3) Strengthen informatization and new production capacity layout.

After the listing, the production capacity will be increased. Next year, the Chongqing production base will be gradually put into production, and the production capacity constraints will be 杭州桑拿 gradually eliminated.

Informatization control is strengthened to improve efficiency and reduce costs. This year, the main business net interest rate is about 8%, and there is still room for improvement in the future.

4) The overall bathroom volume conditions are basically mature, or it will usher in rapid development.

Huida has advanced technology and talent reserves in the overall bathroom industry. It plans to invest 10 billion in phases, and is expected to build an annual production capacity of 150,000 sets of overall bathroom products. The first phase of 50,000 sets will be put into production in May 2019.

  Due to the sale of Dafeng Coking Co., Ltd. to obtain investment income, the 19-year profit forecast was raised, and the company’s 19–21 year net profit is expected to be 3.

3.7 billion / 3.

4.6 billion / 4.

7.0 billion (was originally expected to be 2.

8.3 billion / 3.

4.6 billion / 4.

07 billion), the growth rate was 41.

0% / 2.

7% / 17.

7%, corresponding to PE of 12.

5X / 12.2X / 10.

3 times, maintaining the “overweight” level.

  Risk warning: less-than-expected delivery, increased competition in the industry, etc.