Turkish Stock (002440) Interim Report Comments: Results Meet Expectations Q2 Gross Margin Increase Drives Results to Momentum Growth

Turkish Stock (002440) Interim Report Comments: Results Meet Expectations Q2 Gross Margin Increase Drives Results to Momentum Growth
Investment highlights: The company released its semi-annual report for 2019: operating income in the first half of the year32.6.8 billion (-4% YoY).2%), net profit attributable to mother 8.2.7 billion (+ 17% YoY).2%), net profit after deducting non-return to mother 6.270,000 yuan (-10% year-on-year.0%), with Q2 operating income of 14.6.6 billion (-19% year-on-year.2% quarter to quarter -18.7%), net profit attributable to mother 5.6.7 billion (+ 41% year-on-year.9%, +118.1%), net profit after returning to the mother.6.2 billion (-6% year-on-year.8%, an increase of 36 over the previous quarter.6%), the performance was in line with expectations. The performance was in line with expectations, and Q2 gross margin improvement led to a sequential increase in performance.Reporting information, the company’s dye business income 26.$ 7.1 billion, an average of ten years.4%, gross margin 40.2%, zero for one year.6 pct.The short-term safety and environmental protection expectations are becoming severe, and the production of small and medium dyes and intermediate companies continues to promote the central price increase of products, especially the “321” explosion in northern Jiangsu, which caused the northern Jiangsu ‘s Xiangshui, Binhai, Guanyun, and Guannan parks to be completely shut down.The supply of Q2 dyes and intermediates has fully contracted, and product prices have increased rapidly.The highest quotation for disperse dyes reached 70,000 / ton, and the actual transaction price rose to 5.50,000 / ton.According to Zhuochuang Information, the average transaction prices of disperse dyes and reactive dyes in the first half of the year were 42.2, 30.6 yuan / kg, up 19 before.3%, 13.3%.However, the company’s dye business income and gross profit margin decreased slightly, mainly due to high reorganized dye prices and low downstream demand, which transformed the company’s reactive dyes into a mobile migration stage in the first half of the year, which affected sales and caused intermediate prices to rise and the company’s northern JiangsuThe suspension of production at intermediate subsidiaries will inevitably increase costs.In the first half of the year, Jiangsu Mingsheng, Jiangsu and Larry, and Jiangsu Expedition replaced about 43.59 million yuan, which affected performance.Except for the dye business, the prices of the company’s auxiliary business and chemical raw materials business fell to varying degrees, of which the price of hydrogen peroxide dropped in the first half of the year.6%, the price of ion membrane caustic soda (32%) extended for 19 years.6%.Report on revenue from intermediates and auxiliaries1.34 ppm, a ten-year average of 19.3%, gross margin 28.7%, a ten-year average of 3.9 pct.Income from other chemical materials 4.42 ppm, 14 years average 14.7%, gross 杭州桑拿 margin 26.5% within 9 years.2%.The company’s gross profit margin for the first half of the year was 37.7%, down by 1 each year.8 pct, Q2 has a gross profit margin of 45 due to the rapid growth of dye prices.8%, up 14 from the previous month.7 pct, up 5 per year.4 pct, driving a sequential increase in performance. Uncertainty in the external environment has led to sluggish demand, and the price of dyes has fallen to a low level, and it is expected that the downstream will pick up in the peak season.Due to the strengthening of the external environment uncertainty, the impact on downstream textile export confidence has increased, overlapping industries have entered a low season, and the demand for dyes increased in June and July, resulting in a rapid decline in dye prices.The current transaction price of disperse dyes dropped to about 2.80,000 / ton, the reactive dye transaction price is about 2.60,000 / ton.The traditional “Golden Nine Silver Ten” peak season is expanding, and the demand for dyes is expected to usher in improvement, driving product prices to rebound. Investment suggestion: Maintain the “overweight” rating. Due to the sluggish demand in the third quarter, the price of dyes has dropped rapidly. The profit forecast is lowered.95, 16.07, 17.63 ppm (original value 20).31, 21.98, 23.48ppm), EPS 1.30, 1.40, 1.53 yuan, PE 8X, 8X, 7X. Risk warning: Dye prices fall, downstream demand shrinks, and industry competition intensifies