Incidents: New Beiyang released its 2020 semi-annual report. The company achieved operating income of 931 million yuan in the first half of the year, down 4.81% from the previous year; net profit of the parent company was 66 million yuan, down 57.95% from the previous year; net profit returned to the parent company after deduction was 57 million yuan, down 42.37% from the previous year; net cash flow from operating activities was 97 million yuan, a decrease of 498.64% over the previous year.
Revenue from the active resumption of work and production ushered in a rebound, and the integrated logistics automation solution became the company's new business growth point: in the first quarter, the company's revenue and net profit of the mother fell 24.64% and 78.56% year-on-year respectively. As production and operation activities gradually returned to normal in the second quarter, the company achieved revenue of 515 million yuan, an increase of 20.94% over the previous year. Looking at the segment segment, the company achieved revenue of 662 million yuan in strategic emerging industries in the first half of the year, a decrease of 1.63% over the previous year. Among them, in terms of logistics business, the revenue of smart express boxes declined due to delays in the acceptance and expansion of large customers, but the company responded positively to customer demand, increased market expansion, accelerated product line expansion, and successively won bids for automation product procurement projects of many well-known domestic logistics companies such as Post and SF Express. Order and contract amounts increased dramatically year-on-year; in terms of financial business, sales of key components, core modules and complete machines based on the “bank network transformation scenario” progressed in an orderly manner; in the new retail business, “urban partner plans”, and new equipment cooperation and cooperation were promoted for small and medium-sized operators The number of software users is growing rapidly. In terms of traditional business, mainly due to the outbreak of the overseas epidemic in the second quarter, the decline in customer orders in Europe and the US led to revenue of 269 million yuan, a year-on-year decrease of 11.79%. In terms of gross margin, the gross profit of strategic emerging businesses was 36.62%, a decrease of 5.12% over the previous year; the gross profit margin of traditional businesses was 30.33%, an increase of 7.88% over the previous year.
The rate for the period increased slightly, and the pressure on cash flow was evident: the company's rate for the first half of 2020 (excluding R&D) was 17.15%, up 2.85% from the same period last year. Among them, sales expenses were 87 million yuan, an increase of 27.98% over the previous year, mainly due to an increase in maintenance service fees for corporate financial products; management expenses of 63 million yuan, a decrease of 4.86% over the previous year; and financial expenses of 9.8353 million yuan, an increase of 63.98% over the previous year, mainly due to the increase in financial expenses confirmed by the company's issuing convertible bonds in accordance with accounting standards. In terms of R&D, the company focused on the technological development direction of the industry and carried out a series of key technology R&D and key product development work around strategic emerging businesses. The total R&D investment in the first half of the year was 172 million yuan, down 2% from the previous year, accounting for 18.44% of revenue, an increase of 0.53% over the same period last year, and the cost rate was 97%. In terms of cash flow, the company's net cash flow from operating activities in the first half of the year was -97 million yuan, a decrease of 498.64% over the previous year. Among them, cash from purchasing goods and receiving labor payments increased by 815.24,800 yuan compared to the same period last year; in addition, net cash flow from investment activities was 511 million yuan, a decrease of 470.37% over the previous year, showing pressure on cash flow.
Continuously strengthening the expansion of new products and scenarios, a steady recovery in performance can be expected: in the first half of the year, the company steadily promoted the construction of a “self-service smart retail terminal equipment R&D and industrialization project” to further strengthen the production capacity of automatic equipment. While stabilizing the existing market sales of various businesses, increase the expansion of new products and scenarios, and actively cultivate new business growth points. With the implementation of large-scale sales in the financial business, the accelerated implementation of automated logistics business applications, the full connection of large, medium, and small customers in the new retail business, and the gradual resumption of import and export of traditional businesses, the company's performance can be expected to pick up rapidly.
Investment suggestions: The company is expected to achieve operating income of 2,664, 32.49, and 3.854 billion yuan in 2020-2022, and achieve net profit of 3.47, 425, and 480 million yuan, EPS of 0.52, 0.64, and 0.72 yuan respectively, and corresponding PE of 21X, 17X and 15X, maintaining the “recommended” rating.
Risk warning: strategic emerging business expansion falls short of expectations; intelligent logistics penetration falls short of expectations; R&D progress falls short of expectations; import and export business is blocked; competition in the automation equipment industry is intensifying.
