Event: the company achieved operating income of 1.587 billion yuan in the first half of 2020, down 5% from the same period last year; the net profit of shareholders belonging to listed companies was 177 million yuan, an increase of 74.85% over the same period last year; and the net profit of shareholders of listed companies after deduction was 126 million yuan, an increase of 34.73% over the same period last year, corresponding to EPS 0.2278 yuan.
It recovered rapidly in the second quarter, with high growth in revenue and net profit. In the second quarter, the company realized operating income of 1.252 billion yuan, an increase of 70.38% over the same period last year, and its net profit was 141 million yuan, an increase of 123.53% over the same period last year. The net profit of non-parent was 141 million yuan, an increase of 143.47% over the same period last year. The performance in the first half of the year was mainly due to the greater impact of the COVID-19 epidemic in the first quarter, with a slight retreat in revenue, but did not affect the steady rise in overall performance.
Inventory has been greatly reduced and inventory turnover has increased significantly. The company's inventory in the first half of the year was 510 million yuan, a decrease of 649 million yuan compared with the same period last year. Among them, the book balance of raw materials was 16 million yuan, a decrease of 26 million yuan compared with the same period last year, and the book balance of inventory goods was 432 million yuan, a decrease of 660 million yuan compared with the same period last year.
Inventory turnover days decreased from 178 to 132 days, and inventory turnover increased from 1.01 to 1.36.
Equity incentives enhance the enthusiasm of core talents. On June 1, the company deliberated and passed the "Bill on granting restricted shares to incentive targets for the first time", granting 6.48 million restricted shares at a price of 2.72 yuan per share to 106company executives, middle managers and core technical personnel. We believe that through the equity incentive plan, the company can effectively enhance the enthusiasm of the core backbone and ensure the stability of the core team.
Profit forecast: we predict that the net profit attributed to the parent company from 2020 to 2022 is 296 million yuan, 326 million yuan and 344 million yuan respectively, and the corresponding EPS is 0.38,0.42,0.44 yuan respectively. The current stock price corresponds to 21.1 times of PE. Maintain the "prudent recommendation" rating.
Risk tips: the risk that product sales are less than expected; the risk of a decline in the prosperity of the industry; systemic risks in the capital market, etc.