Main points of investment
The company released the semi-annual report for 2020: the company realized revenue of 406 million yuan, up 7.71% from the same period last year; realized net profit of 32 million yuan, down 21.37% from the same period last year; realized net profit of 16 million yuan from the same period last year, down 55.82% from the same period last year; gross profit margin 33.65%, down 5.59pct from the same period last year; and net profit rate was 7.34%, down 2.79 pct EPS from 0.06 yuan, down 14.29%. In the second quarter alone, the company achieved revenue of 340 million yuan, a substantial increase of 90.66% over the same period last year, a net profit of 57 million yuan, a substantial increase of 90.35% over the same period last year, and a net profit of 45 million yuan, a substantial increase of 59.76% over the same period last year, exceeding market expectations.
Q2's operation exceeded expectations and its net profit nearly doubled in a single quarter. The company resumed work and production quickly in the second quarter, seized the opportunity of new infrastructure construction, actively expanded the market and production capacity, significantly increased the newly signed orders for communication power supply and data center power supply system, effectively made up for the impact of the epidemic in the first quarter, and achieved positive revenue growth in the first quarter. net profit in the second quarter increased significantly compared with the same period last year.
5G base station power advantage verification, 2020H1 orders increased by 164% compared with the same period last year. China Mobile Limited combined switching power supply bidding in March 2020, the company's share is as high as 40%, ranking first, exceeding market expectations, verifying the company's leading position in the field of 5G base station communication power supply, and laying the foundation for a high increase in orders for the whole year.
The company's new orders for communication power products in the first half of the year totaled 166 million yuan, a substantial increase of 164% over the same period last year, and full orders will support a high increase in annual performance.
IDC power supply solution leader, the successful delivery of new products in Panama. The company has been deeply engaged in the field of communication power supply for many years, and is the domestic leader in HVDC field. In 2019, the company successfully developed a prefabricated 10kV direct-to-240V/336VHVDC power supply system-Panama system, which is a subversive innovation of IDC power supply and distribution scheme. The company's new orders for IDC power supply system products in the first half of the year were 366 million yuan, a sharp increase of 350% over the same period last year. In the first half of the year, the first Panama system has been delivered and put into operation, which is expected to open up new growth space.
Successfully cut into the field of two rounds of power exchange, binding leader ushered in a new increase in performance. In April 2020, the company and Ningde Zhixiang signed a new generation of replacement cabinet cooperation framework agreement, successfully cut into the field of two rounds of power exchange. In the first half of the year, the company has completed product prototype development and supplier qualification review, and is expected to achieve batch delivery this year; by binding two-wheel power change faucet Hello travel, the company is expected to further expand the two-wheel electric vehicle change cabinet market, thus creating a leading domestic two-wheel electric vehicle change cabinet supplier, and the change cabinet business is expected to become a new driving force for performance growth.
Investment suggestion: the company is the leader of 5G base station power supply and IDC power supply system, fully benefiting from the outbreak of demand for 5G base stations, IDC, charging piles and other links in the "new infrastructure". The company has achieved a substantial increase in newly signed orders in the first half of the year, and its operation exceeded expectations in the second quarter, which is expected to support a high increase in annual performance. Cooperate with Ningde Zhihuan to help the company cut into the field of power exchange of two-wheeled electric vehicles and usher in a new increase in performance. We estimate that the return net profit of the company from 2020 to 2022 will be 356 million yuan and 0.36 million yuan, respectively, and the EPS will be 0.31, 0.46 and 0.63 yuan, respectively, corresponding to the closing price PE of 48.4 and 23.9 times, respectively, on July 27, 2020.
Risk hints: 5G base station construction is not as expected, IDC construction is not as expected, market competition is intensified, etc.