Event: Yiyatong announced that the company achieved operating income of 36.097 billion yuan in the first half of the year, an increase of 25.6% over the same period last year, and a net profit of 257 million yuan, an increase of 323.91% over the same period last year.
Comments:
On the revenue side, the company's brand operating business income and gross profit have increased significantly. Operating income in the first half of the year was 36.097 billion yuan, an increase of 25.6% over the same period last year. The revenue of brand operation business in the textile, clothing and beverage industry increased by 158% and 300% compared with the same period last year, driving the gross profit of brand operation business to increase by 213%.
The company's distribution and marketing business achieved revenue of 34.06 billion yuan, a year-on-year growth rate of 22.0%, of which IT communications and industrial raw materials business grew significantly, reaching 95.46% and 113.16% respectively.
Stripping off non-performing assets, the company's asset structure has been significantly optimized, and financial expenses have decreased. The financial expenses of the company in the first half of 2021 were 696 million yuan, down 15.4 percent from the same period last year, of which the interest expenses decreased by 102 million yuan. In the past, companies were limited by the high leverage of supply chain enterprises, and the asset-liability ratio was high. With the improvement of quality and efficiency of 380 platform and the divestiture of non-performing assets. The company will increase by 2.2 billion in July, which will be used for digital transformation and reducing financial risks. the company's asset-liability ratio and financial expenses will continue to decline in the future.
Affected by the transformation of the company, brand operation and marketing business led to an increase in sales costs. The company's sales expenses in the first half of the year were 517 million yuan, an increase of 150.2% over the same period last year, of which the market operating expenses rose from 206 million yuan in the same period last year to 383 million yuan in the first half of 2021.
Digital intelligence transformation + online platform is an important driving factor for the future development of the company. In recent years, the company has shifted from traditional supply chain + distribution business to distribution + marketing-based, vigorously develop high-margin brand operation business, and promote business development through the company's brand operation and marketing capabilities. In the future, the company will continue its mathematical transformation and expand its existing business in many fields and channels. The company expects the proportion of online and offline business to change from 1:3 to 2:3 in the next 3-5 years.
Investment strategy: at present, the restructuring and restructuring of the company has gradually become clear, from supply chain services to supply chain ecological innovation. Deep supply chain service background and mature "380" deep distribution and marketing platform provide the company with unique competitiveness in distribution, brand operation and private brand incubation.
Looking ahead, the effect of the company's transformation will continue to show, or it may be able to replicate the model of the liquor sector to other areas, and it is expected that there is still room for growth on the revenue side. It is estimated that the company's 2021-2023 net profit is 5.50,7.18,977 million yuan, and EPS is 0.21,0.28,0.38 yuan per share, respectively. Corresponding to the closing price on August 17, PE is 29,22 and 16 times respectively. The current valuation is cost-effective and covers the "prudent overweight" rating for the first time.
Risk tips: the second outbreak of the domestic epidemic, affecting the FMCG industry and the company's supply chain business; management changes and other emergencies.
