Zhongshun Jierou (002511), known as “paper grass”, is now facing the embarrassing situation of declining net profit and slashing its stock price. On the evening of February 28, Zhongshun Jierou handed over the company’s 2021 operating “answer sheet”, and Zhongshun Jierou’s 2021 performance express report showed that the company’s attributable net profit during the reporting period was about 582 million yuan, down 35.8% from the same period last year. For Zhongshun Jierou, which has maintained performance growth in the past six years, this situation is inevitably disappointing for investors. In addition, on February 28, Zhongshun Jierou’s intraday stock price hit a new low of 14.52 yuan per share, compared with June last year.
Net profit attributable fell for the first time in seven years
After achieving six consecutive years of net profit growth, in 2021, Zhongshun Jierou’s attributable net profit declined.
On the evening of February 28, Zhongshun Jierou disclosed that the company’s operating income during the reporting period was about 9.194 billion yuan, a year-on-year increase of 17.52%; The attributable net profit attributable to the realization was approximately 582 million yuan, a year-on-year decrease of 35.8%.
Zhongshun Jierou said that in 2021, the company’s production capacity will be effectively released, channel construction will be further improved, and sales will increase. However, due to the rise in international raw material prices, the price of packaging materials, the increase in the company’s production costs, and the increase in market expenses, resulting in a decline in profits. In addition, during the reporting period, the company continued to increase market input, increase promotional efforts, and develop sales networks, resulting in an increase in sales expenses.
According to the data, Zhongshun Jierou landed on the main board of Shenzhen in 2010, is a collection of research and development, production, sales as one of the head enterprises of household paper, the company from the household paper, extended to cotton series products, sanitary napkins, baby diapers and other cross-category household products. Zhongshun Jierou currently has three brands: Jierou, Sun and Doremi; Products focus on roll paper, paper drawer, paper handkerchief, wet wipes, personal care products, baby diapers, cotton soft towels, etc.
It is worth noting that Zhongshun Jierou has maintained a good performance growth trend since 2015, and 2021 is the first time that there has been a decline in performance. Financial data show that from 2015 to 2020, the operating income achieved by Zhongshun Jierou was about 2.959 billion yuan, 3.809 billion yuan, 4.638 billion yuan, 5.679 billion yuan, 6.635 billion yuan and 7.824 billion yuan, respectively; The attributable net profit was approximately RMB88.2 million, RMB260 million, RMB349 million, RMB407 million, RMB604 million and RMB906 million, respectively.
It is understood that the net profit attributable to Zhongshun Jierou has declined since the first half of 2021, and the trend of declining performance has increased periodically. Financial data shows that in the first quarter of 2021, the attributable net profit of Zhongshun Jierou was about 271 million yuan, a year-on-year increase of 47.81%; In the first half of 2021, the attributable net profit of Zhongshun Jierou was about 407 million yuan, a year-on-year decrease of 10.06%; In the first three quarters of 2021, the attributable net profit of Zhongshun Jierou was about 476 million yuan, a year-on-year decrease of 27.88%.
Xu Xiaoheng, an investment and financing expert, said that for individual stocks whose performance has continued to grow in recent years, investors will have higher expectations for the company’s performance, and if the company’s performance is not as expected, it will affect investors’ investment enthusiasm to a certain extent. In response to the company’s related situation, a reporter from Beijing Business Daily called the secretary office of Zhongshun Jierou for an interview, and the staff of the other party said that “at present, the secretary of the board and other personnel have left work and cannot accept interviews”.
Stock prices were “cut off”
Under pressure on performance, Zhongshun Jierou’s performance in the secondary market is also not satisfactory, and its share price has fallen by more than 50% since June 2021. On February 28, Zhongshun Jierou’s intraday stock price also hit a new low of 14.52 yuan per share.
Trading market shows that on February 28, Zhongshun Jierou opened 0.07% lower, the opening price was 14.89 yuan / share, after the opening, Zhongshun Jierou’s stock price continued to decline, and once hit a new low of 14.52 yuan / share during the session. As of the close on February 28, Zhongshun Jierou reported 14.66 yuan / share, down 1.61%, with a total market value of 19.24 billion yuan.
Since June 2021, Zhongshun Jierou’s share price has been falling. Oriental Wealth shows that according to the statistics of post-restoration form, from June 3, 2021 to February 28, 2022, the cumulative decline in the Zhongshun Jierou range was 56.32%, and the stock price has been “cut off”. Zhongshun Jierou said that as a commodity and the company’s core raw material, the impact of the rise in the price of pulp has been first reflected in the company’s stock price.
It is worth mentioning that in May 2021, the actual controller of Zhongshun Jierou issued a “bottom” increase in shareholding, which ushered in a wave of rise in the company’s stock price, and then Zhongshun Jierou launched the third phase of the employee stock ownership plan in May of that year, but after more than half a year, the stock ownership plan was delayed, and on December 1, 2021, Zhongshun Jierou announced that the stock ownership plan was terminated.
Zhongshun Jierou said that due to factors such as rising raw material prices and rising sales expenses due to intensified industry competition, the company’s performance did not meet expectations. In this context, the incentive target also changed from initial full confidence in the stock holding plan to wait and see, and then generally had little willingness to participate, so the company decided to terminate the stock holding plan.
In addition, many directors and supervisors of Zhongshun Jierou voluntarily left in 2021. It is understood that in 2021, in addition to the change of the company’s board of directors, Deng Guanbiao, president of Zhongshun Jierou, Ye Longfang, vice president, Yue Yong and Dai Zhenji, directors, and Zhou Qichao, secretary of the board of directors, voluntarily resigned.
Beijing Business Daily reporter Dong Liang Ding Ning