Jiansheng Group (603558): The rapid growth of seamless underwear business, the company’s profitability increased

The company’s 2018 / 2019Q1 performance has grown rapidly, and its profitability has improved. The company’s 2018 / 2019Q1 revenue has increased by +38 respectively.

62% / + 17.

95%, net profit after deduction is +95.

30% / + 40.


After deducting non-return, the growth rate of net profit increased and exceeded the growth rate of revenue. Due to enhanced sales capabilities and improved management efficiency, the continuous decline in the value of Renminbi and the increase in exchange income led to a decline in the company’s expense ratio, and the replacement of Vietnam’s capacity occupancy ratio increased and interest rates fell., 2018 / 2019Q1 interest rate increased by 11.

97% / 11.

95%, down about 3 before 2017.

9 points.

Qiaoting Tingting’s 2018 deduction of non-returning mothers net profit far exceeds the performance commitment Qiaoer Tingting’s 2018 revenue of ten years +191.

77%, gross margin increased by 3.

66 carats, net profit 1 after deduction to mother.

10,000 yuan, reaching 126 of the performance commitment for the year.


Qiaoer Tingting’s performance growth is mainly carried out in 2018 to promote the amoeba model, increase production capacity and improve production efficiency. Under the condition of optimizing the proportion of large 合肥夜网 customers, it has opened up new domestic customers and the industry’s competitiveness has continued to increase.

The smooth expansion of overseas production capacity will be the main driving force for future growth.
In 2018, the production capacity of cotton socks in Vietnam ‘s Haiphong Base reached 1.

100 million pairs, with an output of more than 100 million pairs, an increase of more than 40% over 2017, reflecting the smooth delivery of production capacity at Jiansheng Vietnam’s production base.

Vietnam’s Qinghua 90 million pairs of cotton socks project and Xing’an 18 million pieces of seamless underwear project are under construction, and it is expected to gradually start production by the end of 2019.

According to company planning, 2019 Vietnam cotton socks crop target 1.

With 500 million pairs, domestic and foreign seamless underwear production capacity has doubled in three years on the basis of 2018.

The future expansion of Vietnam’s cotton socks and seamless underwear production capacity will drive performance growth.

The 2019-2021 results are expected to be 0.

64 yuan / share, 0.

77 yuan / share, 0.

The current average value of 90 yuan / share of the company’s cotton socks and seamless underwear business is in the period of capacity expansion, and the performance growth brought about by the release of production capacity in 2019-2021.

Estimated 2019 net profit is +29.

6%, giving the company 21 times PE valuation in 2019, corresponding to a reasonable value of 13.

44 yuan / share, maintain “Buy” rating.

Risks indicate the risk of poor market demand, the risk of exchange rate changes, and less than expected risks in overseas capacity building.