Hexing Packaging (002228): Re-reading Questions Reporting Our Thinking

Hexing Packaging (002228): Re-reading Questions Reporting Our Thinking

The report “Hexing Packaging, the dual face of angels and devil” published on the Securities Market Weekly on October 9, 2018, questioned the quality of Hexing Packaging’s operations and overcome the ban on liquidation through the acquisition of assets to improve profitability.

Hexing Packaging may drop by 10% the next day, and the company is expected to drop from 7 in the next 5 trading days.

05 drops to 4.

91, a drop of 30%.

In view of the bearish viewpoint, we found through analysis that the company does not have the problems of operating quality and false profits.

There is no problem with the company’s profit quality, and the substantial increase in receivables was mainly due 苏州夜网论坛 to the consolidation and PSCP scale expansion.

The rapid growth of accounts receivable in 2016 was mainly affected by two reasons. One is that in 2016, Hezhong Chuangya completed a consolidated statement with the company, increasing the absolute value of accounts receivable, but at the same time, the company’s revenue scale also increased simultaneously.Second, 2016 is the first year of the PSCP platform. The company needs to shorten the collection period for users by expanding cash to attract original users to enter the platform system. Therefore, the account receivables / income ratio at this stage is slightly increased to 32.

6%, but as the scale of the platform grows, the ratio quickly drops to 26 in 2017.

8%, further stepped up to 22.

5%, indicating that the adoption of the PSCP model has gradually matured, the 南京夜网论坛 overall revenue scale has increased, and the company’s bargaining power for downstream accounts has improved.

In 17 years, the net operating cash flow was negative, mainly due to the delayed discounting of the company’s strategic reserve of raw materials and bills.

The company’s operating cash flow in 2017 was mainly affected by two reasons. One was the rapid growth of corrugated base paper prices in 2017. The company increased the stock of raw materials to prevent continuous increases in paper prices. At the end of 2017, the company’s inventory increased compared with the end of 2016.Up to 2.

2.3 billion; Secondly, due to the high bill discount rate at the end of 2017, the company did not discount bills receivable, so the bill receivables in the first quarter of 2018 increased by 1.

5 billion.

Therefore, the decrease in the amount of operating cash flows in that year is only a temporary adjustment of the asset structure, not the deterioration of the upstream and downstream accounting period structure.

Affected by consolidation, the corruption rate rises, 17?
The gradual decline in 18 years restored the historical average.

The increase in yield in 2016 was mainly affected by the merger and acquisition of Hezhong Chuangya’s assets. However, the company achieved a gradual decline in the resistance rate in 2017-18 by improving the operating efficiency of Hezhong Chuangya while improving its own profitability.The impact of tables has been eliminated.

Under the integration of Hexing, Hezhong Chuangya (Asia) has enhanced operating efficiency and is a high-quality target. There is no purpose of inflating profits by acquiring Hezhong Chuangya (Asia).

Hezhong Chuangya (Asia) was acquired by Crossbridge Hexing in 16 years. Under the integration of Hexing Packaging, the operating efficiency has been greatly improved, and the company’s acquisition consideration is reasonable.

Company 19 to 16?
The 17-year statement was re-adjusted to consolidate the bridge construction and consolidation, basically eliminating the 18-year profit surge caused by the acquisition of non-operating income.

The company’s 18-year growth comes from the expansion of the PSCP business and the steady advancement of its main business, and still achieves a 68% increase in net profit after deductions.

The company’s PSCP is a low-risk and sustainable industry integration path. It has solidly and steadily advanced around the corrugated packaging business. It is expected that double growth can be expected, and a “buy” rating is given.

We expect the company to achieve net profit attributable to mothers in 2019-2021.



16 trillion, with an increase of 48.

1% / 46.

5% / 41.

6%, the current sustainable corresponding PE is 20.



9 times.

Risk reminder: the risk of a sharp rise in raw material prices, serious macroeconomic risks, and the development of the PSCP platform is less than expected.