Rongtai Health (603579) quarterly report comment： single quarter revenue growth rate turned positive exchange rate and asset disposal income boosted profitability

Rongtai Health (603579) quarterly report comment: single quarter revenue growth rate turned positive exchange rate and asset disposal income boosted profitability
Core point of view: The single quarter revenue growth rate turned positive, the exchange rate and asset disposal income boosted profitability. The company achieved total operating income in the first three quarters of 2019.300 million (YoY-7.3%), gross profit margin 29.4% (-3% YoY).9 pct), net profit attributable to mother 2.10,000 yuan (+13 compared with the same period last year).7%) and a net profit of 12.8% (+2 compared with the same period last year).4pct), deducting non-returning mother’s net profit 1.600 million (YoY-22.5%). Q3 single quarter total operating income 5.30,000 yuan (YoY + 1.9%), gross profit margin 29.5% (YoY-1.8 pct), net profit attributable to mother 72 million yuan (YoY + 69.5%), net interest rate of 13.5% (+5 compared to the same period last year).4pct). Disposal of shared massage chair business dragged down revenue and generated asset disposal income in the short-term. In the first half of 2019, the company transferred Wuhan, Heilongjiang, Liaoning and other regions to self-operated massage chairs to dealer operations, resulting in a decrease in related revenue and costs.Ended in 2019H1, the company’s fixed asset-massage equipment book balance is only about 20 million yuan, and the company’s fixed asset balance at the end of 2019Q3 is about 2.6 trillion, a decrease of nearly 18.9 million yuan from the previous month. It is estimated that at present, some shared massage chairs on the Internet have basically been disposed. The report has realized a total of approximately 42.8 million yuan in asset disposal income. The overall expense ratio is basically the same, and the exchange rate is favorable for the hedging company. The sales / management / R & D / financial expense ratio of the first three quarters of 2019 is 10.9% / 3.5% / 5.4% /-0.3% (YoY-0.5 points / -0.3 points / +0.7 points / -0.3pct), in which the corresponding expense ratio in the third quarter was 10 respectively.twenty four.0% / 6.3% /-1.2% (YoY-1.7 points / -0.4 points / + 1.4pct / +0.7pct).At the same time, it reported a total of 1,249 million in gains from changes in the fair value of financial derivatives, mainly exchange rate hedging products, with an increase of 4,543 million. The profit forecast predicts that the company’s net profit attributable to the parent for 2019-2021 will be 2 respectively.6/2.6/2.8 ppm, the latest closing price corresponding to the 2019 PE estimate of 15.3 times.Taking into account the base effect in the second half of the year, the resumption of export orders, the listing of new domestic products, and other factors will drive the company’s operating conditions to improve, given the company’s 2019 PE valuation.0x, corresponding to a reasonable value of 29.44 yuan / share, maintain “overweight” rating. Risks suggest that inside the massage chair, the export market has expanded less than expected; 失败:重查 RMB and raw material prices have risen sharply.