The readings of this report are as follows:

The company announced its mid-2021 report that revenue continued to recover and B-end business played a leading role.

Main points of investment:

Maintain the "overweight" rating. In 2021, H1 achieved revenue of 3.563 billion, an increase of 40.27%, and a net profit of 302 million, an increase of 90.44%, in line with market expectations. We maintain the 2021-2023 EPS forecast of 1.37,1.64,1.94 yuan, and maintain the target price of 28.31 yuan.

Revenue growth continues to recover and B-end business continues to grow. Q2 achieved revenue of 2.154 billion, an increase of 20.62% over the same period last year. We expect the growth rate of Q2 C and B to be about 10% and 30%.

We believe that 2020Q2 retail has returned to the normal growth platform of about 10%, and looking forward to the second half of the market and next year, the retail base effect will be significantly improved, and the overall retail growth pressure is likely to appear. We expect that the company's B-side 2021H2 and 2022 are still expected to maintain 30% growth, becoming the most important driver of the company's performance.

The gross profit margin was basically flat, and the reduction in management costs led to an increase in net profit margin. We believe that excluding the impact of accounting policies, the overall gross profit margin of the company H1 is 35.95%, which is basically the same as 36.09% of 2020H1. At the same time, the company continued to strengthen its internal management, the H1 management expense rate decreased by about 2 percentage points compared with the same period last year, the sales cost decreased significantly due to accounting adjustment, the financial expense rate remained basically stable, and the company's net interest rate increased by 2.54 percentage points to 8.60% compared with the same period last year.

The overall risk of receivables on the B side can be controlled. By the end of the reporting period, the company had 1.869 billion cash on hand, an increase of 200 million compared with the same period last year; the total amount of accounts receivable was 1.485 billion, an increase of nearly 350 million over the same period last year (mainly affected by 40% + growth of income at terminal B in the first half of the year), and sales were now flat at 102% compared with the same period last year. It reflects the control of the company's C-terminal genes on payback, and the risk receivable of the company as a whole

Risk hint: the risk of a sharp decline in real estate investment and a rise in the cost of raw materials