Events:
According to the semi-annual report released by the company, the operating income reached 49.264 billion yuan, an increase of 29.83% over the same period last year; the return net profit reached 107 million yuan, an increase of 84.38% over the same period last year; and the non-return net profit was deducted from 50.05 million yuan, an increase of 0.89% over the same period last year.
1. High growth of Nengliang e-commerce to create full-channel coverage
The company is a leader in the field of intelligent terminal sales, with a long-term market share and active expansion of e-commerce platform business. the sales revenue of e-commerce business reached 9.487 billion yuan in the first half of 2023, an increase of 77% compared with the first half of 2022. The company has won the authorized cooperation of many well-known head brands, such as Apple Inc, Huawei, oppo, vivo, Midea, Haier and so on, to enhance the ability of omni-channel coverage, and actively build digitalization to promote business upgrading.
2. Cost control improves profitability, the cash flow of business activities increases significantly at the expense end, the company controls expenses, and the expense rate decreases significantly during the period. While the total revenue keeps growing by nearly 30%, the absolute value of sales / management / financial expenses all declined compared with the same period last year. The overall profitability has improved, and 2023H1's net interest rate has reached 0.23% (YOY+0.06pct).
In terms of cash flow, the net cash flow generated by the company's operating activities in the first half of the year was 2.607 billion yuan, an increase of 81.35% over the same period last year, mainly due to the increase in 23H1 sales and purchase payables, but due to the increase in the repayment of working capital loans, the overall net increase in cash and cash equivalents decreased by 27.43% compared with the same period last year.
3. Bind core customers, enrich the layout of industrial chain and enable long-term development the company binds major mobile phone customers. The company is the core agent of Apple Inc in China and the largest supplier of Apple Inc brand on JD.com platform; it has long-term cooperation with Huawei to maintain the size of about 50% service stores; at the same time, as the most core state agent in Samsung China, the company has a domestic market share of nearly 1500.
Mobile phones extend the mobile phone maintenance business, and the self-built brand "easy repair Brother" focuses on mobile phone maintenance, providing C-end consumers with one-stop ecological services such as mobile phone maintenance, accessories sales, mobile phone recycling and so on. At the same time, through the joint acquisition of mobile phone brand "WIKO" to expand and layout to the upper reaches of the mobile phone industry chain, the first Hongmeng Ecological 5G smartphone was released in China at the end of 2022.
New energy vehicle business, the company continues to layout offline physical store car sales business. Xingtai City, Hebei Province, "car flash store" as the central point, radiation to Shijiazhuang, Handan, Baoding three cities, continue to expand new energy vehicle business, open up new business directions, enable the company's long-term development.
Profit forecast and investment advice: the company deeply ploughs the sales field of 3C products, and extends the business layout, which can be expected in the future. It is estimated that the company's 23-25 return net profit will be 2.5 Universe 32 million yuan, corresponding to a price-to-earnings ratio of 36, 28 and 22 times for 23-25 years, maintaining the "overweight" rating.
Risk hints: the downturn in consumer electronics has led to lower-than-expected revenue and gross margins in mobile distribution and retail business, lower market share of mobile phone brands in Tianyin, lower core business revenue, increased competition in the automotive industry, and lower-than-expected sales of new WIKO products.