Events:
The company released its annual report in 2019, with a total operating income of 6.43 billion yuan, an increase of 14% over the same period last year, a net profit of 192 million yuan, a year-on-year increase of 176.1%, and a net cash flow of 560 million yuan from operating activities, a growth rate of 157.1%. The company intends to pay a cash dividend of 0.8 yuan (including tax) for every 10 shares.
Investment Summary:
Optimization of business structure, explosive release of profits. The company's annual revenue growth rate of 14%, home net profit growth of 176.1%, deducting non-home net profit of 740 million yuan, a growth rate of 108.4%. The explosive release of the profit side is directly related to the company's industrial optimization, and the company spun off the original loss-making electric bicycle business during the reporting period. it further focuses on the core main strategy of "Internet + full cold chain" and realizes the faster-than-expected development of medical cold chain business, optimizes profit structure and improves resource allocation operation efficiency. The company's sales gross profit margin increased by 21.1% compared with the same period last year, while the net profit margin rose sharply to 3.12% from 1.33% in 18 years, realizing the step-by-step optimization of the profit model.
The overall refrigeration business has improved steadily, and the scale of medical ultra-low temperature has exceeded expectations.
The company's core main freezer / refrigerator business reached 3.62 billion yuan, a growth rate of 15.6%, accounting for 56.3% of the total revenue, 15.6% of the business gross profit increased 0.88pct, and the business gross profit accounted for 66.2% of the total gross profit.
Among them, the highly profitable medical cryogenic business grew faster than expected, and the revenue of the corresponding Aucma Cryogenic subsidiary was 168 million yuan, a growth rate of 87.6%, a net profit of 15.914 million yuan, a growth rate of 146.9%, and a 9.5% year-on-year increase in 2.3pct.
The growth rate of other main small and medium-sized household appliances business increased by 89%, the air conditioning and washing machine business improved steadily, while kitchen and sanitary ware declined slightly, accounting for 4.5-8% of the total revenue. The business of electric vehicles and vending machines, which account for less than 1.5 per cent of revenue, fell significantly. The business changes further prove that under the full cold chain strategy, the business focus is focused on the refrigeration core business, and the business optimization leads to the optimization of profit structure.
Take CCTV promotion as the core to upgrade the brand and strongly shape the brand value. Since 2020, the company has become a CCTV "Avenue of Stars" brand selection, vigorously placed advertisements in variety and movie channels, and comprehensively launched brand upgrading, which is also the company's greatest marketing efforts in recent years. Take CCTV promotion as the core company to carry out marketing innovation, integrate online and offline marketing strategies, and innovate and develop sales models such as JD.com monopoly, online batch, C2M, live broadcast with goods, while the commercial side further integrates resources and promotes a full set of refrigeration solutions. speed up the development of emerging markets such as quick-freezing and new retail. The revenue increase brought about by brand upgrading is worth looking forward to.
Major projects continue to be launched, and the company's investment in the early stage of accelerated transformation is gradually released. Prior to this, the company launched a multi-tier project investment under the "Internet + full cold chain" strategy, and raised 746 million in April 2017 to start the construction of the full cold chain system, and upgraded the project again in March 2018. At present, the company's projects in the ultra-low temperature intelligent chemical plant, intelligent logistics warehouse phase I project, the main body of the intelligent cold chain industrial park civil engineering, digital human resources projects have been completed. Follow-up industrial park upgrading, intelligent logistics warehouse phase II and phase III project, intelligent cold chain industrial park, innovation center, information management and control platform and other projects will also accelerate the landing. With the project to accelerate the transformation of the company, it is expected to bring long-term improvement for business structure optimization, capacity supply and internal management.
With the vigorous development of food cold chain and medical cold chain market, the company is expected to take the lead in sharing dividends under the full cold chain strategy. In recent years, the scale of food cold chain has continued to grow under the industrial drive of fresh e-commerce and cross-border trade, and under the influence of the epidemic, the new infrastructure has also clearly landed on major cold chain logistics projects, and the contradiction between supply and demand of food cold chain brings dividends to the market allocation of cold chain equipment; with the acceleration of the Biosafety Law, the equipment end is expected to release short-term concentrated demand under the upgrading of medical cold chain supervision and the release of policies. Under the background that the main competitors of the cold chain are limited, especially under the background that there are only three domestic enterprises with full coverage of medical cold chain equipment, the company is expected to take the lead in sharing the dividend under the release of the cold chain.
Investment suggestion: the epidemic affects food cold chain and medical cold chain equipment to release dividends in the short term, while under the full cold chain strategy of the company's focus in recent years, the short-term pressure on home appliance business continues to release cold chain projects, and the company ushered in a cold chain transition node. Profit structure optimization is expected to have a highly elastic opportunity. After adjustment under the influence of the epidemic, it is estimated that the 20-22 year net profit of the company will be 2.7,3.1 and 450 million yuan, corresponding to EPS 0.34,0.39,0.57 yuan, corresponding to PE 17.6,15.3,10.5 times, maintaining the "overweight" rating.
Risk tips: the landing of cold chain projects is not as expected; the release of food cold chain allocation is not as expected; and the promotion of medicine-related policies is not as expected.