Main points of investment:
The company released its 2019 annual report and achieved high profit growth. The company's revenue in 2019 was 219 million yuan, an increase of 3.06% over the same period last year, and the net profit was 15.13 million yuan, an increase of 111.9% over the same period last year. The non-parent net profit was 13.03 million yuan, an increase of 139.2% over the same period last year. Profits were driven by transformation to achieve rapid growth. Of this total, 19Q4's revenue was 58.43 million yuan, down 5.9% from the same period last year, while its net profit lost 960000 yuan, up 63.4% from the same period last year. The company issued a 19-year dividend plan: a cash dividend of 0.13 yuan (including tax) for every 10 shares and 2 shares for every 10 shares in the capital reserve.
Laser equipment manufacturing dominates the business, and the series of intelligent retail terminals cuts into the blind box industry. In 19 years, the revenue of laser equipment manufacturing was 167 million yuan, down 6.8% from the same period last year, accounting for 76.1% of the total revenue, with a gross profit margin of 34.4%, an increase of 3.18pct over the same period last year. The intelligent retail terminal series achieved revenue of 23.4 million yuan, accounting for 10.7% of the total revenue, with a higher gross profit margin of 50.8%, driving up the overall gross profit margin. The company successfully cut into the blind box industry and brought new growth points. Revenue from 3D and other businesses totaled 28.97 million yuan, down 13.8% from the same period last year, accounting for 13.2% of total revenue and 48.2% gross profit margin, an increase of 2.89pct over the same period last year.
The company optimizes the product structure, and the gross profit margin increases the net profit margin. 1) in 19 years, the company's gross profit margin was 38.0%, an increase of 4.53pct over the same period last year, mainly due to the optimization of product structure and cost control in the industrial intelligence plate, as well as the higher gross profit margin of intelligent retail terminal devices in the business intelligence plate than other products. 2) the gross profit margin increased, the net profit margin increased to 7.2% compared with the same period last year, and the sales expense rate increased by 0.97pct to 14.5% year-on-year, mainly due to the increase in exhibition fees and freight charges, and the management expense rate increased slightly to 8.5% year-on-year. Mainly due to the increase in managers' salaries, the R & D expense rate increased by 0.90pct to 6.7% year-on-year. Mainly due to the implementation of high-end digital laser processing equipment and 3D digital technology application plate (equipment innovation focusing on the promotion channel of IP derivatives). 3) the net operating cash flow decreased by 15.5% to 25.1 million yuan compared with the same period last year, mainly because the increase in bill settlement was lower than that in the same period last year.
We will continue to deepen the transformation of blind boxes, restart the laying of offline unmanned retail channels, and open online marketing channels. The laying of offline channels was suspended due to the company's headquarters in Wuhan and the previous offline retail shutdown, which was restarted in April. The company's doll No. 1 has started live streaming of online celebrities at the end of April after it bought a stake in the MCN marmot. We believe that in the second half of the year, the company will focus on the layout of blind box online sales channels, with content + channels + interaction as the strategy, offline sales revenue boost will become the main focus of the follow-up.
Adjust earnings forecasts and maintain buy ratings. The company's traditional laser business remains stable, and the blind box business develops rapidly. The laying of offline channels and the opening of online channels are two major contributions in 2020. According to news reports, Blind Box Bubble will also declare Hong Kong stocks IPO this year, which will further enhance the valuation of the industry. We adjust the profit forecast for 2020-2021, raise the estimated net profit for 2020-2021 to 197 million yuan (the original forecast is 194 million yuan), lower the 2021 net profit forecast to 477 million yuan (original forecast for 479 million yuan), and increase the net profit forecast for 2022 to 840 million yuan, corresponding to 2020-2022 EPS is 1.56 yuan / 3.79 yuan / 6.67 yuan, corresponding to PE is 33X/14X/8X, maintain the buy rating.
Risk hint: offline blind box vending machine can not be laid on time and quantity; IP development and operation is not up to expectations.