1H20 performance is in line with our expectations
The company's 1H20 revenue was 1.834 billion yuan, down 25.74%, with a net profit loss of 5.82 million yuan.
Of these, 2Q20's revenue was 1.17 billion yuan, down 13%, and its net profit was 32.92 million yuan, down 9%. Compared with the first quarter, the business situation recovered better, and the performance was in line with our expectations.
Trend of development
The impact of the epidemic on 2Q20 gradually subsided, and the overall business situation recovered better. From a revenue point of view, the company's 1H20 advertising media business is down about 33%, and the 4S store business is down about 24.3%, and the new energy charging business is down about 7.71%. According to data from the Federation of passengers, 1H20's overall passenger car sales in China are down about 23%. The company's advertising business is dominated by public transport path media such as bus bodies and bus shelters, and the operation resumes earlier downstream, and the overall 1H20 decline is controllable; the decline rate of automobile 4S store business is similar to that of the overall automobile market; charging business benefits from the earlier recovery of downstream public transport operations and the further expansion of the company's overall network layout, resulting in a small decline in revenue, but due to the decline in overall utilization, gross profit margin has declined. From a quarterly point of view, we have observed that the decline in overall revenue and profits of 2Q20 is much narrower than that of the first quarter, the pace of business recovery is better, and the impact of the epidemic gradually fades.
In addition, the company's 2Q20 fees have been further optimized, with the period expense rate of only 10%, the lowest since 2018.
Passenger car market ushered in the turning point good 4S store business, downstream travel gradually recovery good advertising and charging, business is expected to continue to improve quarter by quarter. According to the data of the Federation of passengers, wholesale sales of passenger cars in China increased by 6%, 1% and 7% respectively in 5-6-7, and the downstream sales market ushered in an inflection point.
Under the control of the epidemic and the recovery of economic production and life, the demand for driving and public travel is also gradually picking up, which is good for the further recovery of the company's 4S store car maintenance, bus-related advertising and charging service business. As a result, we believe that the company's business is expected to further improve quarter by quarter.
Profit forecast and valuation
We maintain the expected net profit of 104 million yuan and the target price of 4.5 yuan. The current share price and the target price correspond to 2020x2021e 33xPmax E and 35x27x Pmax E, respectively, with 5.6% upside space to maintain the industry rating.
Risk.
The utilization rate of charging piles climbed less than expected, and car sales in 4S stores fell short of expectations.
