The performance exceeded expectations. In the first half of 2020, the company achieved revenue of 374 million yuan, an increase of 27.64% over the same period last year, and a net profit loss of about 29.22 million yuan, compared with a net profit of about 850000 yuan in the same period last year. The main reason for the loss of net profit is that the equity investment software is still in the early investment period, with a loss of 94 million yuan in the first half of the year, resulting in a loss of 37 million of the company's investment income. If the impact of investment income is deducted, the company's net profit in the first half of the year was 8 million yuan, a positive growth. From the perspective of the second quarter, the company achieved revenue of 240 million yuan in the second quarter, an increase of 41.82% over the same period last year, reflecting a good growth momentum.
During this period, the expense rate is properly controlled. The company's sales expense rate and management expense rate (excluding R & D expenses) in the first half of the year were 2.92% and 8.11% respectively, down 0.98% and 2.01% respectively compared with the same period last year. At the same time, the company realized net operating cash flow of-11 million in the first half of the year, compared with-22 million in the same period last year. Taking into account the impact of the epidemic on the business in the first half of the year, we believe that the company has achieved good results in cash flow management such as sales rebates.
The business of UniCredit software is progressing smoothly. By the first half of 2020, Tongxin Software has achieved 39 million revenue, and the process of commercialization has already begun. Since the official establishment of Tongxin software in November 2019, the business of UOS unified operating system has developed by leaps and bounds, with important breakthroughs in product side, organizational structure and employee side, international market and ecological side. We believe that Tongxin Software is expected to become the backbone of the domestic operating system to break the current situation of "core annoyance", and the company, as its important shareholder, will fully benefit from the wave of localization of the operating system.
Investment suggestion: the company is the industry leader of domestic operating system, we are very optimistic about the company's future development prospects, the company's EPS in 2020 and 2021 is expected to be 1.34,1.88 yuan, continue to focus on recommendation.
Risk hint: the progress of UOS promotion is lower than expected; the risk of gross profit margin decline due to intensified competition in the industry; and the excessive risk of fixed increase plan.
