Event: in the first three quarters of 2020, the company achieved revenue of 3.47 billion yuan, an increase of 53.1% over the same period last year, a net profit of 200 million yuan, an increase of 125.1% over the same period last year, and a net profit of 190 million yuan, an increase of 129.9% over the same period last year. Of this total, Q3 achieved revenue of 1.41 billion yuan in a single quarter, an increase of 57.5% over the same period last year, and a net profit of 76.35 million yuan, an increase of 120.6% over the same period last year.
The rate of company expenses is stable, and the gross profit margin has increased significantly. (1) the gross profit margin in the first three quarters was 48.7%, an increase in 4.9pp compared with the same period last year, mainly due to the rapid development of Zebao business and the significant increase in the proportion of small household appliances with high gross profit margin caused by the overseas epidemic. (2) during the first three quarters, the expense rate was 40.6%, an increase of 1.6pp compared with the same period last year, in which the sales expense rate increased to 34.4%, the management expense rate decreased by 1.7pp to 2.8%, the R & D expense rate decreased by 0.1pp to 1.6%, and the financial expense rate increased to 1.8%, mainly due to the combined impact of the increase in financing scale and exchange rate changes. (3) the operating cash flow in the first three quarters was-130 million yuan, mainly due to increased procurement expenditure for Q4 peak season stock preparation.
The company's future highlights: (1) categories: Zebao adheres to the boutique route and is rich in category reserves. in addition to forming strong competition in the 3C field, the field of small household appliances is developing rapidly and has become an important bright spot; (2) Channel highlights: while Amazon.Com Inc's online business is developing steadily, the company is gradually expanding offline customers in the United States, Japan, the Middle East and Australia, while increasing the development of markets in the Middle East and North Africa. (3) Management focus: the company's incentive mechanism is in place, and channel development, sales performance, sales payback and performance are linked. In addition, large equity incentives were also released before binding to the core management; (4) profit points: the company comprehensively combs all aspects of manufacturing, research and development, sales and management, constantly improving quality and efficiency, and profitability is expected to continue to improve in the future.
Profit forecast and investment advice: the company's 20-22 net profit is expected to be 3.1,4.0 and 540 million yuan respectively, an increase of 109.5%, 29.7% and 33.6% over the same period last year. The company is valued at 30X PE for 21 years, corresponding to a reasonable value of 34.20 yuan per share, and the "buy" rating is maintained.
Risk hint. The development of brand GMV may not be as expected, the overall revenue growth rate of e-commerce platform may not be as expected, and the time interconnection operation may not be as expected.
