Matters: the company released its 2020 results KuaiBao, during which the total operating income reached 5.477 billion yuan, an increase of 12.72% over the same period last year, and the net profit attributed to shareholders of listed companies was 285 million yuan, an increase of 15.10% over the same period last year; EPS 0.41 yuan, down 0.56% from the same period last year The weighted average return on equity was 9.18%, down 1.64 percentage points from 10.81% in the same period last year (the above data have not yet been audited by accounting firms).
The growth rate of revenue performance rebounded significantly, and the performance of Q4 grew rapidly. The company achieved year-on-year revenue growth of 12.72% in 2020, an increase of 7.72 pct over the previous three quarters. Revenue growth of 2020Q1-Q4 in each quarter was-35.25%, 14.32%, 33.91% and 33.82%, respectively. Since the second quarter, as the epidemic has been effectively controlled, the company's business has gradually recovered, and revenue growth has improved significantly. The company's performance release also showed a trend of accelerating quarter by quarter, becoming the dark horse of the decoration industry. In 2020, the company achieved a net profit of 285 million yuan, a year-on-year growth rate of 15.10%, higher than the annual revenue growth rate, a substantial increase of 13.90 pct over the previous three quarters, and a rapid rebound in annual performance. From a quarterly point of view, the year-on-year growth rate of 2020Q1-Q3 's net profit is-47.67%,-2.27%, 21.25% and 83.33%, respectively.
Emerging business is worth looking forward to, and refinancing helps the company grow. Around the traditional decoration business, the company actively extends to housing construction, municipal, curtain wall, garden and other engineering fields, while adding property management, IDC, cloud computing, block chain and other business. The company has completed 55% of the equity acquisition of Saige property and 100% of Jiazette, and the scale of property management has been expanding. In terms of IDC and cloud computing, in May 2020, the company acquired a 60% stake in wide original Electronics by cash acquisition, and plans to invest 1.5 billion yuan to build Wusha (Kuanyuan) big data Center. It is estimated that the total number of cabinets will reach 10,000 upon completion.
In addition, the company is actively transforming to the blockchain, and the smart chain has been successfully put into operation. On December 11, 2020, the intelligent chain platform of smart chain opened the first bank block chain to pay the order, and the blockchain business officially set sail, and the future development is worth looking forward to. According to the announcement, the company intends to issue convertible bonds for construction projects, Wusha (Kuanyuan) big data Center and replenishment, convertible bond financing funds will help the company's performance release.
Equity incentives were implemented smoothly, and orders were sufficient to support the release of performance. The company launched the 2020 restricted stock incentive plan and completed the restricted stock grant in February 2021. The restricted stock incentive plan covers a wide range of people and encourages 131 people, which is helpful to fully stimulate the enthusiasm of the company's managers and other core personnel. The performance evaluation target of the exercise conditions of the equity incentive plan at the level of revenue growth is that the average annual growth rate of operating income from 2021 to 2023 is not less than 25%, indicating the company's confidence in future development and promoting the company's strategic transformation and performance release.
The company signed a new order of 7.056 billion yuan in 2020, an increase of 4.36% over the same period last year, which is significantly better than the overall level of the decoration sector. by the end of 2020, the company had orders of 10.573 billion yuan, which is 1.93 times the revenue in 2020, and the order is sufficient to support the improvement of future performance.
Investment suggestion: the company's operating income from 2020 to 2022 is expected to be 5.477 billion yuan, 6.845 billion yuan and 8.352 billion yuan respectively, up 12.7%, 25.0% and 22.0% respectively over the same period last year; net profit is 285 million yuan, 368 million yuan and 467 million yuan respectively, up 15.1%, 29.3% and 26.7% respectively over the same period last year; earnings per share are 0.40,0.51 and 0.65 yuan respectively. The dynamic PE of the company is 16.9,13.0 and 10.3 times, and the PB is 1.5,1.4 and 1.2 times, respectively. The company focuses on the main decoration industry, actively expands and extends around the engineering industry chain, and transforms new fields such as property management, IDC, cloud computing and so on through extension expansion strategy. Through endogenous growth and extension expansion, the company's performance rebounded rapidly and became a decorative dark horse. We are optimistic about the growth of the company and the improvement of the valuation of the new business, and maintain the "buy-A" rating with a target price of 9.6 yuan.
Risk tips: performance is not as expected, order growth is slow, transformation is lower than expected, refinancing is blocked and so on.
