1H20 performance is in line with our expectations
The company announced 1H20 results: revenue was 778 million yuan, up 0.05% over the same period last year; net profit from home was 158 million yuan, down 23.31% from the same period last year, which was basically in line with our expectations, corresponding to profit per share of 0.12 yuan; net profit from non-return was 142 million yuan, down 25.34% from the same period last year, and non-recurrent profit and loss mainly came from government subsidies. From a quarterly point of view, Q1/Q2 revenue is-22.12% compared with the same period last year, while net profit is-32.76% and 14.68% respectively. By the impact of the epidemic, Q1 performance declined more seriously, Q2 revenue and profits improved.
Trend of development
1. Store sales boost the company's revenue in the first half of the year, while commercial property leasing business is still under pressure: 1) property leasing: income of 445 million yuan, down 13.69% from the same period last year, affected by the epidemic, the company issued a strong rent reduction and other policies; 2) Store sales: realized income of 297 million yuan, up 50.54% from the same period last year, mainly from its small town company entrepreneurship park and other projects 3) Hotel service: realized income was 4.4214 million yuan, down 58.98% from the same period last year, and the hotel industry was depressed by the epidemic; 4) financing guarantee: realized income of 5.2272 million yuan, down 25.37% from the same period last year, mainly due to measures such as the reduction of guarantee rates to support the resumption of work and production of small and micro enterprises; 5) Health industry: realized income of 8.6897 million yuan, an increase of 42.96% over the same period last year, and the company continued to promote the second main business.
2. Cost control has achieved certain results. 1H20's gross profit margin decreased by 12.43ppt to 43.43% compared with the same period last year, mainly due to an increase in operating costs due to an increase in operating costs due to the carry-over of store sales. 28.23ppt On the expense side, the company actively carried out fee reduction measures. The sales expense rate decreased to 4.59% compared with the same period last year, the management expense rate decreased by 1.42ppt to 5.39%, the financial expense rate decreased to 0.08%, and the R & D expense rate increased by 0.24ppt to 0.33% year-on-year. Under the comprehensive influence of the epidemic, the company's net interest rate decreased by 6.19ppt to 20.34% compared with the same period last year, and after deducting non-profit, the net interest rate decreased by 6.20ppt to 18.24% year-on-year.
3. Affected by the epidemic, offline retail is under pressure, and the company continues to carry out transformation and upgrading and format optimization. The main leather industry optimizes the layout, invigorates idle assets, while actively expanding online business, setting up live broadcast bases, holding online excipients exhibitions, setting up new media groups, etc.; as the second main business of the company, the large health industry continues to promote the layout; financial business strives to provide diversified financing channels for leather enterprises. In the follow-up, we need to continuously follow up the transformation and optimization of the company.
Profit forecast and valuation
The company temporarily maintains the company's earnings forecast of 0.19 yuan per share in 2021, while the current share price corresponds to 24 times of 2020 prime in 2021. Maintain a neutral rating, taking into account the current company to promote transformation and upgrading, raising the target price by 9% to 4.56 yuan, corresponding to 2020max 2021 24 times Pmax E, 0.4% higher than the current stock price.
Risk.
The competition in the industry continues to intensify; the adjustment of the industry format is not as expected.