The worse performance of WATER OASIS (01161)

The annual performance of Aos has disappointed the hopeful minority shareholders, even though this year’s profit has reached a new high since its listing in 2002.

In the first half of the year, the profit was 60 million yuan, while the profit in the second half was only about 35 million yuan, a decrease of about 25 million yuan from the first half of the year. I believe that there are two main reasons:

1. In the second half of the year, the revenue decreased by nearly 25 million yuan compared with the first half of the year, and its operating expenses are actually relatively stable, and the gross profit margin is as high as 90%. Therefore, the decrease in income will have a significant impact on earnings;

2. Other expenses in the second half of the year increased by approximately RMB 13 million from the first half of the year, which may be due to the increase in advertising expenses in the second half of the year and the professional expenses involved in the offer repurchase of shares in June.

The current price-to-earnings ratio is about 9.4 times and the dividend yield is about 6.5%. However, due to the share repurchase relationship in June this year, the dividend payment in the first half of the year was greatly reduced, and it returned to normal in the second half of the year. I estimate that the overall dividend payout ratio will return to 90% or more at least next year. If the performance remains unchanged next year, the dividend yield will increase to nearly 10%.

I took a holiday on the weekend and did a simple semi-annual performance analysis. You can refer to it:

From the above chart, we can see that the overall performance in recent years is upward, and the advance receipts (beauty package) are also increasing every year, from 329 million yuan in 2014 to 516 million yuan in the year to the present, but the industry is both thin (01830). This is not the case with Hong Kong Medical Medical (02138) and even Yingge Mier who is applying for listing. However, it is Ouse that has this strange situation. And unlike the other three peers, Oss never announced how many expired packages are recognized as income each year.