Overview of events
E-City released its semi-annual report for 2020, with revenue of 1.28 billion yuan, + 150.4% year-on-year, and net profit of 230 million yuan, + 38.1%, year-on-year.
Substantial growth in performance and improvement in profitability
2020H1 realized operating income of 1.28 billion yuan, an increase of 150.4% over the same period last year, and its net profit was 230 million yuan, an increase of 38.1% over the same period last year. The lower growth rate of net profit than the growth rate of revenue was mainly due to a substantial increase in land value-added tax, which was 209 million yuan in the current period, compared with 2 million yuan in the same period last year. In addition, the company's return on equity and gross profit margin were 3.43% and 56.65% respectively, up 22.76pct and 0.72pct year-on-year, and the profitability was further improved.
Rapid growth of sales and promotion of Shuozhou project
2020H1 achieved sales of 2.51 billion yuan, an increase of 1814.1% over the same period last year, and a sales area of 167000 square meters, an increase of 401.5% over the same period last year. Under the influence of the epidemic, the company's sales scale still achieved rapid growth. In terms of land acquisition, 2020H1 added 219000 square meters of capacity, an increase of 244.8% over the same period last year, corresponding to a total land price of 230 million yuan and a total land price / sales amount of 9.2%. The new land storage in Shuozhou will increase the reserve of high-quality land resources in Shuozhou Electronic City, which will become an important support for the strategic development of Shuozhou Electronic City during the 14th five-year Plan, which is in line with the overall strategic planning of Shuozhou Electronic City.
Continue to promote scientific and technological services, and constantly improve their popularity
During the reporting period, the company completed the reception, transformation and operation of the project park of the Electronic City (Beijing) Integrated Circuit Design and Innovation Center in the first half of the year, and the Guoshou Electronic City Science and Technology Industry Development Fund was promoted and implemented according to the plan. Yingnuo Chuangyijia Science and Technology Venture Capital Fund was officially established, at the same time, various measures were taken to promote investment promotion, and in the first half of the year, it cooperated with many well-known enterprises in science and technology services, industrial interconnection, biomedicine and other fields. The company continues to deepen the construction of science and technology service system, and the popularity of high-tech services in Electronic City continues to improve, and it has won the "Top 50 operators of China Industrial Park in 2020" and "the most innovative science and technology service operator in China Industrial Park in 2020". And once again won the title of "Beijing Integrity Establishment Enterprise".
Investment suggestion
Electronic City performance rapid growth, adhere to the science and technology service strategy to lead the company's development model innovation, good financial situation. We keep our profit forecast unchanged and expect the company's 20-22 EPS to be 0.38x0.46max 0.54, corresponding to a PE of 16.0pm 13.3max 11.3 times, maintaining the company's "overweight" rating.
Risk hint
The transformation is less than expected, the scale of sales is declining, and the provision for impairment of inventory affects performance.