闰 土 股份有限公司 (002440) 2019 third quarterly report comment: The performance is in line with expectations and the sluggish demand is expected to be repaired in the short term

闰 土 股份有限公司 (002440) 2019 third quarterly report comment: The performance is in line with expectations and the sluggish demand is expected to be repaired in the short term
Downstream industry demand was sluggish, and the price of dyestuffs declined in the third quarter. The company’s performance was slightly affected by this.At present, the Sino-US trade friction has improved and the price of dyes is expected to rebound in the short-term recovery of demand. As one of the oligarchs, the company has only a certain room for performance improvement, maintains a target price of 20 yuan and maintains a “buy” rating. Demand in the industry was sluggish, and performance was modest.The company released the third quarter report for 2019, and achieved revenue of 51 in the first three quarters.08 thousand yuan, +1 a year.12%, realizing net profit attributable to mother 10.780,000 yuan, ten years +6.00%, of which Q3 single quarter revenue and net profit attributable to mother respectively18.40 and 2.50 trillion each year +12.08% and -19.46%.Due to the sluggish downstream demand, the price of dyes fell in the third quarter. Due to this, the company’s third-quarter performance declined to a certain extent. Under the oligopoly pattern, it is expected to benefit from the recovery in downstream demand.Affected by the explosion in northern Jiangsu in the first half of 2019, the supply of m-phenylenediamine showed a significant gap, and the price rose sharply. The prices of disperse dyes and reactive dyes rose to 45 and 31, respectively.5 yuan / kg, however, due to the Sino-US trade friction, downstream textile and apparel demand was severely frustrated, and at the same time prices fell to the levels of 29 and 26 yuan / kg, respectively, and the industry’s boom turned sharply.At present, the Sino-U.S. Trade friction has eased to a certain extent in the short term, and the sluggish industry demand is expected to improve. The trend of oligopoly layout has pushed the price of dyes to bottom out and the company has achieved performance recovery as the industry leader. The scale of production capacity increased, and profit expectations increased.The company’s total production capacity is 19, of which the dispersed dye capacity is 11 inserted, the reactive dye capacity is 6 inserted, and the other dye capacity is nearly 2 replaced. The product sales market share steadily ranks among the top two domestic dye market shares.The cumulative expansion of the eight active substance dyes supplemented by the front-end company is expected to increase the scale effect and deepen the oligopoly pattern of the industry, and the company’s profit space has entered an upward space. Risk factors: Sino-U.S. Trade growth worsens; environmental safety inspections fall short of expectations; new capacity launches fall short of expectations. Investment suggestion: Downstream industry demand is sluggish. In the third quarter, the price of dyestuffs fell to a certain extent. The company’s performance was slightly affected by this.At present, the Sino-U.S. Trade friction has eased and the price of dyes is expected to pick up in the short-term recovery of demand. We are optimistic that the company, as one of the oligarchs, will certainly have a certain room for performance improvement, maintaining the company’s 南京夜生活网 EPS forecast for 2019-20 to 1.68/2.06/2.30 yuan, maintain 20 yuan target price (12 times PE in 2019), maintain “Buy” rating