19 Annual report & Quarterly report: the company's 2019 revenue was 52.94 billion yuan, an increase of 24.7% over the same period last year, and its net profit was 50 million yuan, an increase of 122.0% over the same period last year. The 19Q4/20Q1 revenue was 156.4 / 14.38 billion yuan, up 33.8% and 40.9% respectively over the same period last year, and the net profit of returning to the mother was 0.2 million yuan, up 108.4% and 504.1% respectively over the same period last year. After deducting the non-deduction, it increased by 117.4%, respectively, and it increased by 872. 6%.

Rapid growth of business income: in 19 years, the company's revenue growth rate was at a high level, mainly due to the rapid development of the company's retail e-commerce business, and the Ministry of Industry and Information Technology officially issued a 5G license in 19th. it has brought a wave of opportunities for the mobile phone manufacturers that the company serves, and the company's mobile phone distribution business has also achieved great growth during the reporting period. Due to the low base in the same period last year and other reasons, 20Q1 maintained a high level of revenue growth, continuing the previous growth, but the operating costs of the company increased due to the impact of the epidemic.

In terms of products, retail e-commerce business performed best, the number of category expansion, the number of cooperative brands and the number of SPU increased rapidly, and the business income tripled to 6.46 billion yuan in 2019. In addition, with the continuous promotion of the company's "1N1" industrial development system, the sales of the company's core business communications products have maintained rapid growth, and cooperation with customers such as Apple Inc and Huawei has also been deepened. the annual revenue is 45.38 billion yuan, an increase of 10.1% over the same period last year. However, as the company's key business, the overall revenue of the lottery has declined to a certain extent, with annual revenue of 390 million yuan, down 8.6% from the same period last year.

Net profit continues to improve: 19Q4's net profit was 39 million yuan, an increase of 116.6% over the same period last year, a great increase. On the one hand, the retail e-commerce business was expanded, on the other hand, the company recognized investment income of 176 million yuan from the sale of the winery in the first quarter. In 1919, the company's comprehensive gross profit margin was 3.72%, an increase of 0.4pct over the same period last year. Among them, the annual gross profit margin of communication product sales and lottery were 2.4% and 68.1% respectively, an increase of 0.8% and 15.7pct respectively over the same period last year. On the one hand, because the company's channel advantage and resource integration ability began to show further in 2019, it became the leader in the mobile phone distribution industry. The company has maintained close cooperation with Apple Inc, Huawei and other big companies, and with the advent of the 5G era, Huawei's continued expansion of mobile phones has also led to the company's performance growth. On the other hand, the company's domestic lottery business is at a stable level of development, there are successful domestic projects in the last half of the year, and the expansion of overseas markets has also achieved some results. In addition, the annual gross profit margin of the 19-year retail e-commerce business was 3.93%, which also improved the company's overall gross profit margin and net profit to a certain extent. The comprehensive gross profit margin of 19Q4/20Q1 company is 4.1%, 5.6%, respectively, which is an increase of 1.8/-1.4pct over the same period last year. 20Q1's profitability has been affected by the epidemic to a certain extent.

Investment advice: the rapid development of retail e-commerce business, superimposed 5G replacement tide, is expected to bring new vitality to the company. We expect the company's net profit from 2020 to 2022 to be 230 million yuan, 250 million yuan and 270 million yuan, an increase of 360%, 8.7% and 8% respectively. Maintain the "overweight-B" rating.

The expense rate is well controlled: the expense rate during the 19-year period of the company is 3%, which is 1.2% lower than that of the same period last year. The expense rate of 19Q4pm 20Q1 is 2.9% and 3.2% respectively, and the 2.4/0.1pct is reduced respectively compared with the same period last year. The sales rate for 19 years was 1.5%, a decrease of 0.7pct over the same period last year; the sales rate for 19Q4/20Q1 was 1.4% Universe 1.7%, respectively, an increase of-1.4pm 0.2pct over the same period last year; the management R & D expenses for 19 years was 0.8%, a decrease of 0.2pct compared with the same period last year; and the 19Q4/20Q1 management R & D fee was 1.0% Universe 0.8%, respectively, a decrease of 0.7/0.1pct over the same period last year. The financial rate was 0.7% in 19 years, a decrease of 0.2% from the same period last year; among them, the financial rate of 19Q4/20Q1 was 0.6%, 0.6%, respectively, down 0.3/0.1pct from the same period last year. In 19 years, the company improved its cost control ability, which further reduced the expense rate, but at the same time, because the company won the lottery project and added the qualification of a new high-tech enterprise, the company did not reduce its R & D investment. instead, it continues to invest in new R & D projects.

The operation is in good condition: in 19 years, the company's operating cash flow was 1.11 billion yuan, an increase of 55.1% over the same period last year. The cash flow of 19Q4Universe 20Q1 was RMB 1.67 million respectively, an increase of 327.4% over the same period last year. The cash flow of the company decreased to a certain extent. The accounts receivable and bills of the company at the end of the first quarter of 20 years were 1.612 billion yuan, up 930 million yuan from the end of 19 years, and the turnover days increased from 1.18 days to 7.18 days, mainly due to the increase in the payment due to customers. Accounts payable and bills were 6.92 billion yuan, an increase of 1.41 billion yuan over the end of 19, mainly due to the increase in payments due to suppliers at the end of the period. There was no advance payment, which was 1.043 billion yuan lower than that at the end of 1919. The inventory was 3.55 billion yuan, a decrease of 350 million yuan compared with the end of 19.

A number of measures to improve themselves: the company continues to focus on the industrial Internet strategy, taking offline channel gridding as the basic network and online trading system as the platform to form an industrial ecosystem of "offline network and online platform". The company will deeply expand the gridding channel network, and construct a supply chain platform by obtaining high-quality product resources from major upstream manufacturers, combined with Internet technology, to provide competitive products and services for all kinds of retail terminals, and create a new ecology of S2B2C industry interconnection in the field of consumption. The company takes the mobile phone business as the core, takes the lottery as the key business, gradually increases the commodity category, and gradually forms the "1mm N" industry development system.

In terms of mobile phone business, "replacement tide", on the one hand, the company strengthens the deep cooperation with customers and fully combines customer brands and product advantages with the company's strong channel capacity and marketing network to achieve common development. On the other hand, the company will take "one network, one platform" as the starting point, make full use of the company's large number of channel resources and strong integration ability of the mobile phone supply chain, and gradually realize the strategic layout of "one network, one platform". In terms of lottery business, the company needs to continue to adhere to the business thinking of "based at home and development overseas". In terms of retail e-commerce business, while stabilizing the development of its own business in 2020, the company should begin to gradually strengthen the business scale of non-mobile phone products in order to advance to the ultimate goal of integrated retailers. In terms of mobile resale and mobile Internet business, the company will further improve operational efficiency and quality, control service costs, and ensure business profitability.

Risk hints: new business development is not as expected, epidemic repeated risks, lottery business is not as expected