Events:
In 2019, the company realized total revenue of about 426 million yuan, a decrease of 27.12% over the same period last year; net profit of 66.045 million yuan, an increase of 107.85% over the same period last year; and earnings per share of 0.06 yuan, an increase of 107.79% over the same period last year.
Main points of investment:
Tamping the management foundation, improving quality and increasing efficiency have achieved remarkable results.
During the reporting period, the company's performance improved significantly and the overall business quality improved significantly, mainly due to the further optimization of the stock business. among them, deepening the system reform, comprehensively establishing the professional manager system and the chief internal control officer system, and reconstructing the scientific performance appraisal system can clarify the responsibility to a greater extent, reduce the management risk, and lay a solid foundation for the continuous reform. In business, the company's education and small loan business continued to operate steadily in the past 19 years, and the game business significantly reduced losses, so that the overall business status has been further consolidated.
In terms of educational business, Chengdu Shude Borui Experimental School has steadily improved its teaching ability, brand strength, daily management and later guarantee ability by improving its leadership and management team. the results are reflected in the undergraduate admission rate of 96.2% and the heavy undergraduate admission rate of 63.1% in 1919. Both indicators have reached new highs and both exceeded the provincial undergraduate rate and heavy cost rate of the Chengdu Bureau of Education in 1919. During the reporting period, Borey's education business achieved a total income of about 129 million yuan, a net profit of 32.1764 million yuan and a stable gross profit margin. We believe that the company has an outstanding competitive advantage in the education business and a strong momentum of self-optimization and innovation, which can enable the business to maintain sustained and steady growth.
Small loan business, Bo Rui small loan revenue of 46.4506 million yuan, net profit of 23.68 million yuan, profitability improved steadily. On the premise of business risk control, Borey small loan has comprehensively upgraded the company's small and micro products, completed the transformation of small and micro decentralized loans, and made a total of more than 700 loans in the whole year, nearly double the amount of loans in 2018 compared with the same period last year. So that the small loan business performance is good.
In terms of game business, competition in the industry has continued to intensify over the past 19 years, and the number of approval for version numbers has continued to tighten so that the survival pressure of small and medium-sized companies in the industry continues to increase. Therefore, the company's current game business is still in the stage of tapping potential and reducing consumption, with annual revenue of 90.4072 million yuan, an increase of 5.46% over the same period last year. Roaming Valley turned its annual performance into profits by virtue of the multi-channel release of the key game "National Master H5". In addition, roaming Valley currently has a number of games under research, so that there is room for further improvement in future performance.
In terms of leasing business, the company continues to enrich the commercial facilities of the building and the operation of office space, actively promotes customer satisfaction and recognition of the company's building business, and promotes the gradual landing of a number of characteristic commercial projects. The rental rate is 83.71% and the lease renewal rate is 77.06%, contributing a total net profit of 8.3976 million yuan during the reporting period. The company's outdoor advertising business is mainly to strengthen stock carding and steady expansion, the clean-up and withdrawal of individual loss points is carried out in an orderly manner, and at the same time, it begins to layout elevator horizontal media resources in major cities across the country. at present, general generation or cooperation agreements have been signed with a number of large and medium-sized cities. In terms of performance, the advertising business achieved a revenue of 112 million yuan and a gross profit margin of 22.53% during the reporting period. There is still room for improvement in the future.
Investment rating and profit forecast
We believe that the company's overall reform and development and business optimization achievements have begun to show. At present, the fundamentals are sound and solid, the book funds are relatively sufficient, and the asset-liability ratio has been further optimized, providing a good foundation for the expansion of follow-up business. The focus in the future lies in the further improvement of the quality and efficiency of the main business and the landing of extension mergers and acquisitions. To sum up, we give the company an investment rating of "increasing holdings". Without considering the company's extension mergers and acquisitions, the company's EPS is expected to be 0.07,0.07 and 0.08 yuan per share respectively from 2020 to 2022. Investors are advised to keep paying attention.
Risk hint
The company's business development is not up to expectations, major changes have taken place in the business, the advertising and game industries remain in the doldrums, the bad debt rate of small loan business has increased significantly, and the late external mergers and acquisitions and project landing are uncertain.