Leading paper industry paper industryZhongshun JierouPaper Co., Ltd. (002511.SZ, hereinafter referred to as Zhongshun Jierou) was released on January 4th.announcement: Company director, board secretary, deputy general manager Zhou Qichao and director and deputy general manager Liu Jinfeng reduced their holdings by no more than 790,000 shares.
In the past six months, Zhongshun JierouExecutiveThe reduction is more than once. If it is calculated from the highest price of 10.69 yuan on June 5, 2018, the closing price as of January 9, 2019 is 8.17 yuan, a decrease of 23.48%, and the market value is about 3 billion yuan.
Does frequent executive reductions represent a question of the company's future development? As the development of the consumer industry is slow, how is the progress of Zhongshun Jierou's transformation? In this regard, the investor network sent a letter to the Zhongshun Jierou board secretary Zhou Qichao and sent an interview letter, and did not receive a relevant reply.
4 executives reduced their holdings to more than 10 million
Founded in 1999, Zhongshun Jierou is a consumer goods company that produces, processes and sells high-end tissue paper products. The categories focus on five types of roll paper, coreless paper, paper, paper handkerchief and wet wipes. Soft and sun two brands of household paper products. In the first half of 2018, the revenue of its household paper was 2.337 billion yuan, accounting for 98.09% of the revenue.
Since 2018, Zhongshun Jierou has four executives with ten different levels of reduction, totaling about 10 million yuan.
Among them, the investor network saw in the enterprise, Liu Jinfeng also served as a director of Zhongshun Jierou (Hubei) Paper Co., Ltd., Zhou Qichao invested in Wuhan HejiOracleConsulting Management Co., Ltd. is also a supervisor, and holds 100%, 35%, 35%, 30% of Wuhan Hutchison Tianyuan Building Materials Co., Ltd., Wuhan Netzhong Polymerization Communication Co., Ltd., and Han Ding Guanghua Brand Management Consultant (Wuhan) Co., Ltd. Wuhan demarcated Guanghua Real Estate Marketing Co., Ltd.
Some insiders believe that: "From the executive position of Zhongshun Jierou, which has reduced the number of shares, it can be seen that the proportion of the company's total share capital is not much, nor is it big.shareholderBehavior, so the overall impact on the company is small, but it does not rule out the possibility that these executives have doubts about the company's ability to transform. ”
Tight cash flow
In fact, since 2015, Zhongshun Jierou has replaced the marketing team and positioned the mid- to high-end market.Net profitGrowth has made a big breakthrough, but it lasted less than two years, its 2017PerformanceStart to fall back. At the same time, in the first half of 2018, the revenue of 2.586 billion yuan and the net profit of 199 million yuan were not listed in Hong Kong stocks.Vinda International,Hengan International.
In addition, due to the single product restrictions of the household paper industry, in recent years, the product innovation of Zhongshun Jierou has not changed much, and the rising cost of raw materials has also made the company face difficulties in operating cash flow. In the first three quarters of 2018, the company also borrowed 750 million yuan in short-term loans, an increase of 794.33% compared with the same period of last year, and only increased by 11.64% in the same period of 2017.
Not only the operating cash flow in the first half of 2018 was negative. From January to September 2018, Zhongshun Jierou’s operating cash flow was also -40 million yuan, down 111.49% year-on-year. At the same time, the investor network flipped through the company in 2014? In the same period of 2017, the financial report found that its operating cash flow was positive, respectively 169 million yuan, 308 million yuan, 563 million yuan, 366 million yuan. As for the negative operating cash flow in the first half of 2018 and the first three quarters, the company explained in the financial report: "Because of the increase in payment materials."
In this regard, some insiders believe that: "Zhongshun Jierou should be short of money now, so it implemented short-term loans in the first three quarters of 2018. The reason for the lack of money seems to be related to the increase in pulp costs in recent years and the increase in company procurement costs. This leads to a phenomenon of less cash flow. However, as Zhongshun Jierou said that the cash flow is negative because of the payment of materials, the material cost it pays now, the products produced may produce the company’s future profitability. Influence, it will inevitably face Maointerest rateThe risk of slipping. According to Zhongshun Jierou's household paper, there are so many product categories in the company, and the source of revenue is fixed.interest rateLower, profits will also decrease. So we can roughly predict that its future profit growth will not be too fast, but it will not be a sharp decline. But from the current point of view, its gross profit margin is the number one in the paper industry. ”
Material cost becomes a stumbling block
Perhaps in order to improve gross profit margin and market competitiveness, Zhongshun Jierou began to expand into new areas: the development of personal care products, beauty and maternal and child cotton wipes. On July 23, 2018, the company launched a wet and dry application for mothers and children, especially newborns and female consumers. It can be used as a personal cleansing care product such as cotton pads and face washes. At the same time, the investor network also saw in the answer channel of the Secretary-General, the director of Zhongshun Jierou also revealed the possibility of producing sanitary napkins, diapers and other products in the future.
However, the increasing cost of pulp has caused invisible cost pressure on Zhongshun Jierou. In the second half of 2017, the pulp rose sharply, up 50%, and the price remained high in the first half of 2018. From the first half of the 2018 financial report, the main raw material for the products produced by Zhongshun Jierou is pulp, and the cost of pulp consumed in production accounts for 50%. 60% of the company's production cost.
The industry believes: "In recent years, the price of pulp has not only risen sharply, but environmental supervision has also begun to be strict. These are long-standing phenomena. On the bright side, it has accelerated the reshuffle of the industry and eliminated some production that cannot keep up. The bad side is that it affects the future performance indicators of the surviving companies. Zhongshun Jierou is no exception."
There are also people in the industry who believe that: "Zhongshun Jierou not only faces the rising cost of materials, but also faces competition from companies such as Heart and Heart, Breeze and Vinda. Since the unit price of household paper is low, consumers are currently using it for their daily lives. The price requirements for paper are not as high as expected. Today, several of the top paper companies in the world do not have much difference in the sense of use and quality of their products. In addition, the price of household paper is lower. As a result, the company's entire transportation costs accounted for a large proportion of the sales price. Due to the transportation radius, the competition in the tissue paper industry was dominated by regional market competition. The current production and sales factories of Zhongshun Jierou were concentrated in Guangdong and Sichuan. Provinces, Hubei Province, Zhejiang Province, such as Central China and South China, so in the future, we need to expand the market scale to enhance our own advantages."
(Article source: Investor News)