Event: the company recently released its semi-annual report for 2021. During the reporting period, the company realized revenue of 84.04 billion yuan, + 27.19% compared with the same period last year, and realized net profit of 1.507 billion yuan, + 200.81% compared with the same period last year. The increase in the company's revenue and return net profit is mainly due to the temporary closure of the company's business outlets affected by the COVID-19 epidemic last year and the recovery of performance this year.
The gross profit margin is stable and the fine management reduces the expense rate. The company's H1 gross profit margin reached 9.46%, down 0.09 percentage points from the same period last year. The rate of sales expenses was 3.04%, down 0.3% from the same period last year; the rate of management expenses was 1.59%, down 0.27% from the same period last year, which we believe is mainly due to the company's orderly implementation of the digital strategy transformation formulated at the beginning of the year to improve the level of fine management. The financial expense rate was 1.60%, down 0.70% from the same period last year, mainly due to the company optimizing the financing structure, actively expanding financing channels, reducing the cost of capital, and the decline in interest expenses compared with the same period last year.
Steadily promote the transformation of digital strategy. In the first half of 2021, the company began to gradually promote the transformation of digital strategy: 1) the establishment of Huili Automotive Technology (Shanghai) Co., Ltd., a data operation technology platform, was completed in January 2021 to build a platform for the strategic transformation of the company's traditional business; 2) to promote the pilot of "Smart 4S Store", including intelligent marketing attempts such as increasing the conversion rate of latent customers, activating customers and recalling lost customers. 3) continue to promote various digital innovations, use WeCom Central Station and front-end tools to analyze customers by big data; 4) further promote the ecological construction of the automobile industry and carry out different industry alliances with excellent industrial giants. In April 2021, the company and Ping An Insurance signed a strategic cooperation agreement, the two sides will fully realize the sharing of resources and complementary advantages. We believe that the digital transformation will help to increase the user retention rate and further reduce the company expense rate.
The used car market has fully recovered and the company is ready to start. On the one hand, the company vigorously promotes the used car replacement business, on the other hand, based on the national used car professional platform company, it upgrades the original local used car trading service center. Driven by the policy dividend, the used car market has maintained a momentum of rapid growth. In the first half of 2021, a total of 8.4342 million used cars were traded nationwide, an increase of 52.89% over the same period last year, and the used car market recovered in an all-round way. The company's second-hand car business is ready to start.
Profit forecast and rating: the company's net profit from 2021 to 2023 is expected to be 3.011 billion, 3.438 billion and 3.811 billion respectively, and EPS is 0.37,0.42,0.47 yuan respectively, with a price-to-earnings ratio of 7.76,6.79,6.13 times respectively, maintaining the "buy" rating.
Risk hint: the demand for cars is not as expected, and the company's new business development is not as expected.