Jihong Shares (002803) 2018 Annual Report & 2019Q1 Review: Synchronous and High Growth of Cash Flow and Optimistic Marketing and Packaging

Jihong Shares (002803) 2018 Annual Report & 2019Q1 Review: Synchronous and High Growth of Cash Flow and Optimistic Marketing and Packaging

Endogenous + epitaxy drives rapid growth in performance.

2018 initially achieved operating income22.

69 trillion, +100 for ten years.

34%; net profit attributable to mother 2.

1.3 billion, +166 a year.


The company announced a dividend distribution plan for 2018, and distributed a cash dividend of 5 yuan (including tax) to all shareholders for every 10 shares, totaling a cash dividend of 98.6 million yuan and a dividend rate of 46%.

After deduction, return to mother’s net profit 2.

20,000 yuan, +162 for ten years.

twenty four%.

Excluding the delayed acquisition of Longyu Star, the company’s endogenous growth rate of revenue / net profit was 76.

13% / 77.


In terms of quarters, the growth rate of revenue in 18 years has shown a trend of high and low, mainly due to the company’s rapid growth in the establishment of cross-border e-commerce business since August 2017, and a large base in the second half of the year.

In the first quarter of 2019, it achieved operating income6.

71 ppm, +58 for ten years.

96%, achieving a net profit of 7281.

430,000 yuan, +284 a year.

89%. The profitability of the new business is higher than that of the traditional business. The company’s net profit growth rate is higher than the revenue growth rate, and its performance has maintained rapid growth.

The Internet business is the main driving force for the company’s growth, and the packaging business has grown steadily.

In terms of revenue structure, the packaging business grew by 15 per year in 2018.

51% to 10.

6 ppm; Internet business grows by 461 in ten years.

94% to 12.

09 million yuan, the rapid growth of Internet business, accounting for 53% of revenue.


Among them, cross-border e-commerce business revenue reached 9.

3.3 billion, accounting for 41% of revenue.

12%; In March 2018, the company acquired Beilong Yuxing Star to expand its precision marketing business, and contributed 2018 revenue2.

7.6 billion, accounting for 12.

16% (Considering the consolidation at the end of March, Longyu Star has an income of about +467 in an endogenous decade in 2018.

41%, up to 3.

6.6 billion).

In 2018, the packaging / cross-border e-commerce / advertising business respectively achieved net profit attributable to the mother of approximately 0.



6.8 billion, accounting for about 22% / 46% / 32%.

New business grew rapidly and profitability improved significantly.With the development of new business, the company’s profitability has improved significantly.

The shortest gross profit margin in 2018 is +15.

6 pieces to 43.

06%, of which, thanks to the decline in raw materials and the introduction of new products, the gross profit margin of packaging fell and rose2.

87pcpts to 18.

In terms of Internet business, due to the decline in the gross profit margin of the advertising business on the accounting caliber, the cross-border e-commerce business transformed the development of the advertising business, and the overall gross profit margin of the Internet business fell by -13.

46pcpts to 64.


Due to the e-commerce accounting caliber, the period expense rate increased by +12.

7 pieces to 31.


The company’s e-commerce drainage costs, warehousing and logistics are included in the cost, so this business is reflected in a higher gross profit margin and a higher expense ratio.

As the proportion of e-commerce increased, the company’s expense ratio showed an upward trend.

Among them, the company’s e-commerce advertising, logistics costs and other expenses increased rapidly, the sales expense ratio +12.

39 to 26.

43%; the company develops new business, introduces new teams, increases employee compensation, management expense ratio (considering research and development expenses) +0.

49pcpts to 4.

14%; although bank loans increased, the income expense was diluted and the financial expense ratio was -0.

17pcpts to 1%.

Benefiting from the increase in the proportion of highly profitable businesses (Longyu Star in 2018, Jikeyin’s net interest rate was 26% and 11%, higher than the packaging business), the company’s net interest rate decreased by +2.

33pcpts to 9.


From the perspective of 2019Q1, the company continues to gross, and the net interest rate and expense ratio have both increased.

Gross margin ± 8.

63pcpts to 41.

86%, net margin +6 per second.

37 pieces to 10.

84%, the rate of growth during the period +3.

19 to 29.

31%, of which the sales expense ratio +0.

82 to 22.

65%, overhead rate (considering R & D expenses) + 2pcpts to 5.

02%, financial expense ratio +0.

37pcpts to 1.

64%, improved operating quality and dazzling cash flow performance.

The company’s accounts receivable turnover rate in 2018 was 7.

23 rose to 8.

4. Turnover rate of accounts payable is 5.

87 up to 5.

42, inventory turnover rate from 6.52 rose to 6.

83. Net cash flow from operations 2.

57 trillion, +508 for ten years.


The platform is a cross-border e-commerce platform for each other. The company adopts a unique export social e-commerce model and uses AI big data to select products and match customers.

When the user places an order, the supplier is shipped in real time, and the pre-sale inventory is reduced.

Excellent inventory and cash back management reflects a lot of beautiful cash flow.

From the perspective of 2019Q1, the company realized zero net operating cash flow.

73 trillion, ten years +57.

78%, each operating index is optimized every year.

Investment suggestion: The company is a leading domestic consumer display paper bag company. It has a forward-looking layout of QSR, cluster packaging, offline traffic value mining, and accurate marketing. With the support of accurate marketing, the city’s share will be further enhanced.

In addition, the cross-border e-commerce business refers to the broad market of single-page SNS marketing for Southeast Asian products, high profitability, 杭州桑拿 high turnover, outstanding cash flow performance, and sustained growth.

The company’s management team is based on creativity, and the three major sectors are integrated and developed.

We expect the company to achieve EPS 1 in 2019-2021.

59, 2.

28, 2.

83 yuan, corresponding to PE 15, 10, 8x, maintain “highly recommended” level.

Risk reminders: fluctuations in raw material prices; operating risks of major packaging customers; intensified competition in the cross-border e-commerce market; less-than-expected promotion of code scanning business.