Performance growth was in line with expectations, and investment returns boosted performance. The company achieved operating income of 6.72 billion yuan in 2020, an increase of 1.1% over the previous year, and net profit of 110 million yuan, an increase of 35.3% over the previous year, in line with the company's performance forecast of 98 to 123 million yuan.
The company's net profit growth rate was higher than the revenue growth rate mainly because: 1) the company's investment income was 89 million yuan, an increase of 75 million yuan over 2019; 2) the trading service business was progressing steadily, with revenue increasing 11.4% year-on-year and gross margin of 19.3%, which is basically the same as in 2019.
The profitability of the agency sales business has increased markedly, and the Internet+ business has achieved a high increase in revenue.
In 2020, the company's trading services sector achieved revenue of 4.78 billion yuan, an increase of 11.4% over the previous year, accounting for 72.0% of total revenue, an increase of 7.1 percentage points over 2019. Trading services are the basic business that accounts for the highest share of the company's revenue, and its steady growth has ensured the company's basic market. Looking at split transaction services, the agency sales business achieved revenue of 2.99 billion yuan, an increase of 4.9% over the previous year, and the Internet+ business achieved revenue of 1.58 billion yuan, an increase of 30.9% over the previous year. Together, the two drive transaction services to achieve double-digit growth. In 2020, the gross margin of the agency sales business was 27.2%, up 3.6 percentage points from 2019.
The increase in management area has driven a steady increase in revenue, and profitability has improved markedly. In 2020, the company's property management business achieved revenue of 6.3 billion yuan, an increase of 6.5% over the previous year, accounting for 9.4% of revenue, an increase of 0.5 percentage points over 2019. Gross margin was 14.8%, up 2.4 percentage points from 2019, contributing 94 million yuan to gross profit, accounting for 11.7%, and up 2.9 percentage points from 2019. By the end of 2020, the company was actually managing 101 commissioned projects, a net increase of 3 over the same period last year. The actual fee area for the management project was 5.57 million square meters, with a net increase of 709,000 square meters. According to revenue estimates, the unit price was 9.5 yuan/m2/month, a year-on-year decrease of 7.1%.
Maintain buy ratings. Due to the drastic reduction in the management area of industrial and commercial assets and long-term rental apartments in the asset management service sector, the amount of agency sales achieved but not settled declined markedly in 2020, and we lowered our profit forecast. We forecast the company's EPS for 2021-2023 to be 0.13/0.14/0.15 yuan (the original forecast was 0.17/0.20 for 2021-2022).
Risk warning: The decline in transaction services exceeded expectations; the development of property management fell short of expectations.