The performance bottomed out and stabilized, cash flow improved, and the bottom upward trend was obvious. 2020H1 achieved operating income of 1.323 billion yuan, a decrease of 21.99%. The net profit belonging to shareholders of listed companies was 128 million yuan, a decrease of 40.78%. 20H1's gross profit margin and net profit margin were 31.40% and 9.41% respectively, which increased 0.97pct and decreased 3.01pct respectively compared with the same period last year. The expense rate during the company period was 15.11%, which was the same as last year's increase in 0.55pct. The company's core business, film and TV drama copyright operation and services, achieved revenue of 1.023 billion, a decrease of 23.38%, a gross profit margin of 31.79%, an increase of 14.64% over the same period last year, and an income of 266 million from audio and video technology business, an increase of 11.43%.
Strengthen the operation of the copyright repository, deeply bind with Migu, activate 2020H1 to achieve revenue of 1.023 billion, with a decrease of 23.38%, and achieve a net profit of 269 million, an increase of 10.81%. During the downward period of the industry, Q2 performance relatively exceeded expectations.
With the shutdown of cinemas nationwide in the first half of the year, the company increased the operation of the film library and carried out in-depth operation and cooperation with partners; 20H1 signed a three-year in-depth cooperation agreement with Mobile Migu on the online pre-release mode of film and television rights, and cooperated with new customers such as live broadcast short videos to explore new modes of realization of copyright content and expand the ability to realize through multiple channels.
The goodwill risk is basically eliminated, the company strengthens the collection, and the impairment receivable is expected to stabilize by the middle of 2020. the remaining 3.052 billion goodwill on the company's account, the core is Huashi net gathering, and the goodwill impairment risk is basically eliminated. In addition to goodwill, the amount of the company's provision for bad debts in 19 years is relatively large, accounting for 35% of the 19-year asset impairment provision. a small number of customers are traditional audio and video customers, and most of them are customers in the film and television content production sector. it is expected that a number of film and television works will be launched at the end of the 20th year. Among them, the important project "Huo Qidi" will also be put on the agenda, and it is expected that the company's provision for bad debts may be partially recovered. The remaining accounts receivable of 20H1 is about 2.2 billion, and the company will continue to strengthen the collection.
Investment advice: business fundamentals continue to improve, maintain the "buy" rating.
The company's copyright business was affected by cinema release, and audio and video technology-related orders were delayed by the epidemic, resulting in a reduction in the company's 20-21 profit of 23.86% and 13.63%. It is estimated that the company's 20-22 net profit will be 4.42% and 6.91 million, respectively. The company's 20-22 EPS is 0.17, 0.27 and 0.33 yuan, corresponding to a PE of 3321. 17x. Taking into account the current company is still at the bottom of the relative position, the pledge rate is reduced, fixed growth is expected to hit the ground, a variety of items of the signal continues to improve, maintain the buy rating.
Risk tips: the fixed increase plan has not been examined and approved by the CSRC; the impact of the epidemic continues to drag down the company's annual performance; the risk of accounts receivable recovery; the risk of intellectual property protection.