Rongtai Health (603579): The transformation of light asset-oriented operations is waiting to start
Event Overview The company released three quarterly reports and achieved operating income in the first three quarters of 201916.29 ppm, a decrease of 7 per year.32%; net profit attributable to mother 2.09 million yuan, an increase of 13 in ten years.69%.Among them, the third quarter of 2019 achieved operating income5.32 ppm, an increase of ten years.93%, net profit attributable to mother is 7,199.640,000 yuan, an increase of 69 in ten years.53%.  Analysis and judgment: The domestic sales market continued to grow, Q3 revenue rebounded. The massage chair’s export market was dominated by the United States, Japan, and South Korea. The company’s export market focused on large Korean customers and the impact of external sales revenue.With the increasing penetration of the Korean market, the company actively expands its partners in the European and American markets to maintain strong export demand.In the domestic market, under the background of aging population and rising consumption power, the massage chair market is in the growth stage. The current penetration rate of the internal massage chair market is less than 1%. The growth of domestic sales is higher than the export growth under the demand of large healthy consumption. The gross profit margin was under pressure, the expense ratio decreased and the net profit margin was improved. In the first three quarters of 2019, the company’s gross profit margin was 29.42%, a decrease of 3 per year.92 points.Among them, the gross profit margin in 2019Q3 was 29.45%, -1.7pct, ring than -0.2pct.The growth rate of gross profit margin always lies in the short-term difficulty of covering experiential services to cover costs and the drift of gross profit margins for domestic and overseas sales.At the same time as the growth rate of gross profit margin, the company enhanced its ability to control expenses to achieve an increase in net profit margin.In the first three quarters of 2019, the company’s sales expenses subsidized10.85% -0 per year.54 points; The sales expense ratio for the third quarter of 2019 was 10.17%, ten years +1.71pct, -0.87 points.The first three quarters of 2019 company management expense subsidies3.43%, five years -5.03pct; of which the 2019Q3 management expense ratio is 3.99% -5 per year.33pct, chain +1.69 points.In the context of the decrease in the cost of the period, the company’s net profit rate in Q3 2019 was 13.5%, +4 per year.9pct, ring than -0.4pct. Shared massage “Momo Da” promotes consumer experience and cultivates the market. The asset-light operation transformation company’s 2019 semi-annual report shows that the company entered the shared massage service market in 2016. “Momo Da” shared massage brands have gradually entered 32 provinces across the country.Well-known business superstores in 2164 counties and cities, head theaters and important transportation hubs.The company’s channel development is fast, and the shared massage service has expanded consumer contact and conducted good market cultivation.At present, the number of Momoda users has exceeded 100 million, the maturity of the big data operation platform has been transformed, and the company’s business transformation 成都桑拿网 has become less asset-oriented.The company successively transferred self-operated massage chairs in some provinces to high-quality operators for cooperation and operation, thereby achieving cost reduction and efficiency improvement.Under the influence of Modou top-up, the company’s advance payment in the first three quarters of 2019 was 0.7.4 billion, an increase of 65 in ten years.12%.Under the influence of the disposal of fixed-asset massage equipment, the company achieved zero asset disposal gains in the first three quarters of 2019.43 trillion, long-term receivables1.2.3 billion.  After investment advice calculations, we expect the company to achieve operating income in 2019-2021.73/26.41/31.500,000 yuan, an increase of 3 in ten years.36% / 11.30% / 17.56%, net profit attributable to mothers2.61/2.97/3.53 ppm, an increase of 4 per year.74% / 13.73% / 18.90%, earnings per share is 1.86/2.12/2.52 yuan, corresponding to the current expected PE multiple of 15/13/11, the first coverage given to “overweight” level.  Risk prompts macroeconomic downside risks, risks of changes in the competitive landscape, risks of trade frictions