Zhejiang Longsheng'S Third Quarter Performance Is High And Intermediate Price Is High And Stable.

Recently, the Zhejiang Longsheng group Limited by Share Ltd (hereinafter referred to as "Zhejiang Longsheng") reported that the three quarter of the company reported that its operating income in the first three quarters of the company was 16 billion 620 million yuan, an increase of 14.1% over the previous year, and the net profit attributable to shareholders of listed companies increased by 3 billion 882 million yuan, up 22.13% over the same period last year. The net profit attributable to shareholders of listed companies after deducting non recurring gains and losses was 3 billion 380 million yuan, up 9.85% over the same period last year. Among them, the net cash flow generated by operating activities was 4 billion 241 million yuan, up 51 times compared with the same period last year.

The report shows that the operating income in the third quarter of 2019 was 6 billion 974 million yuan, an increase of 29.17% over the same period last year. The net profit attributable to shareholders of listed companies was 1 billion 351 million yuan, up 2.30% from the same period last year, a record high in the single quarter.

According to Guoxin Securities Limited by Share Ltd researcher analysis, although the third quarter is the traditional demand season of dyestuff industry, but because of the weak demand for dyestuffs this year, the industry has actively increased the market supply in the peak season, resulting in a certain decline in the price of dyes in the three quarter, especially the price of disperse dyes. The overall callback of the sales price of dye business has affected the profitability of the company. Even if the dye sales volume has increased, the gross profit margin of Zhejiang Longsheng in the third quarter is only 34.10%, which is significantly lower than that in the second quarter (gross profit margin 49.64%). By contrast, the average selling price of Zhejiang Longsheng intermediate products has been maintained at a high level and has played a supporting role in its third quarter results.

In the future, the supply of industry will still shrink. Taking into account the second round of Central Environmental Monitoring and "looking back" action, it is expected that the capacity of dye and intermediate industries will continue to shrink in the future. The downstream of the dyestuff is mainly textile and apparel. In September 2019, the total value of retail sales of clothing and textiles was 947 billion 940 million yuan, up 3.3% over the same period. It is expected that with the easing of trade war and the arrival of the peak season of winter textile industry, the demand for dyes is expected to rise.