The company's 2020 performance fell short of our expectations.
The company announced its 2020 results: revenue of 4.525 billion yuan, down 13.4%; net profit of 68 million yuan, down 21.8%; deducting 64 million yuan of non-net profit, down 22.6%; affected by the epidemic in the first half of 2020, the investment income loss of 21 million yuan of assets and credit impairment and 12 million yuan of investment income was superimposed, and the annual performance was lower than we expected. Judging from the quarterly operating situation, the operation of 4Q20 further improved, with revenue increasing by 0.1% year-on-year / month-on-month increase of 16.9% to 1.45 billion yuan, and net profit of 135.7% / month-on-month increase of 40.9% to 43 million yuan.
Trend of development
The scale of charging piles has expanded rapidly, and the ability of social service has been continuously improved. In 2020, the number of charging stations / charging piles put into operation reached 345 / 2029, an increase of 120% / 122% respectively, of which 989 were dedicated to bus service within the group, an increase of 29%. The number of public charging piles for social vehicle services has increased by nearly 6 times. Benefiting from the improvement in the service capacity of public transport / social vehicles, even under the impact of the epidemic in the first half of 2020, the company's annual charging capacity reached 256 million kilowatt hours, the same as in 2019, with a total revenue of 420 million yuan, a drop of 13%, a service fee of 0.9 yuan / kWh, and a gross profit margin of 32.1%, maintaining a high level in the industry. In 2021, the company will further improve the layout of the bus charging network and social public piles in the group. at the same time, it will also gradually promote the opening of bus stations to the outside world, provide charging services for rental / sanitation / logistics and other industries, and further expand the scope of social services. We believe that driven by the stable charging demand within the group and the increase in the scale of social services, the company's charging business is expected to see high growth in 2021.
The traditional business has recovered well and the gross profit margin has improved significantly. 4Q20's traditional business recovers well, with revenue from advertising media business / auto 4S store business rising 31% to 1.14 billion yuan, respectively. For the whole year, revenue from advertising media business / auto 4S store business is 373.53 billion yuan, down 21.3% and 8.5% respectively. The gross profit margin increased by 5.09/0.26ppt to 76.0% and 7.3% respectively over the same period. Among them, the increase in the gross profit margin of the advertising media business is mainly due to the reduction of part of the media usage fees of the car body, resulting in a substantial reduction in media amortization, depreciation, maintenance costs and other costs. We believe that with the relief of the domestic epidemic and the recovery of demand in the automotive industry in 2021, the company's traditional business is expected to achieve high growth and profitability may be further improved.
The operating cash flow is strong and the cash dividend scheme is bright. The company's operating cash flow in 2020 is 403 million yuan, reaching nearly 6 times the current net profit, and the main business is running steadily; at the same time, the company plans to pay a cash dividend of 64 million yuan (including tax) in 2020, with a dividend rate of 95%, a sharp rise from 37% in 2019.
Profit forecast and valuation
We are optimistic about the driving force of the company's downstream recovery on business growth in 2021, maintaining the profit forecast of 134 million yuan in 2021 and introducing a profit forecast of 143 million yuan in 2022. We maintain the target price of 4.5 yuan and outperform the industry rating. The current stock price and target price correspond to 2021Universe 2022e 20.6xPmax E and 27.125.3X Pcane, with 31.6% upside space.
Risk.
The utilization rate of charging piles climbed less than expected, and car sales in 4S stores fell short of expectations.
