Beijing New Building Materials (000786): Major lawsuits and profit bottoming out, and the company set sail again

Beijing New Building Materials (000786): Major lawsuits and profit bottoming out, and the company set sail again

Investment Highlights Event: The company announced the first half performance forecast, which is expected to be re-released6.

4-7.

800 million, down 149 every year.

3% -160.

1%, basically can increase the income of 0.

379-0.

462 yuan / share.

The subsidiary Taishan Gypsum lawsuit reached a full settlement.

Under the settlement, Taishan expects it to pay a total of two.

$ 4.8 billion (not including the cost of a class action notice for an unknown class member) to settle the class action.

The 2.

US $ 4.8 billion will be a single one-time replacement in the estimated financial statements of Taishan Gypsum for the first half of 2019 as a projected budget, resulting in a decrease of Taishan Gypsum’s net profit for the first half of 2019 by approximately 170,492.

RMB 560,000.

Affected by this impact, the settlement affected approximately 170,492 net profit of the consolidated statements of Beijing New Building Materials in the first half of 2019.

RMB 560,000.
Expected settlement costs are expected to mitigate major litigation risks.

We believe that this settlement will resolve the risks of major lawsuits, which will help Beijing New Building Materials and Taishan to significantly reduce the cost of litigation (the average annual cost in the past three years is about US $ 100 million) and release performance; at the same time, clear the obstacles in the company’s internationalization, Is conducive to the development of subsequent international business.

The decline in profit has narrowed, and the low point in profit has now been reached.

We calculated that after excluding the impact of litigation costs, the company made a profit in the first half of the year9.

25-10.

65 ppm, an increase of -28% in one year?
-18%, single quarter profit of 5 in the second quarter.

97-7.

37 ppm, a year-on-year increase of -26%?
-8%, the profit margin narrowed compared to -33% in Q1.

We believe that the company’s gypsum board sales increased slightly in the first half of the year, and the price was affected by a high base. Once it improved, the price of 19Q2 and the single flat gross profit were basically stable from 19Q1.

If the demand for gypsum board is 武汉夜生活网 stable in the second half of the year, it is expected that the profit level may pick up.

Investment suggestion: We adjust the company’s profit forecast. It is expected that the company’s net profit attributable to its mother in 2019-2021 will be 7 respectively.

100 million, 28.

1 ppm and 31.

4 trillion, the closing price on July 31 corresponding to PE were 42.

8 times, 10.

8 times and 9.

7x, maintaining the rating of “prudent increase”.

Risk Warning: Real Estate Investment Exceeds Expectations