Event: the company released its 2020 annual report, with an operating income of 6.723 billion yuan in 2020, an increase of 1.10% over the same period last year, and a net profit of 111 million yuan, an increase of 35.33% over the same period last year.
Comments:
The growth rate of performance becomes positive, and the income from equity disposal thickens profits. The company achieved revenue of 6.72 billion yuan in 2020, an increase of 1.1% over the same period last year, and a net profit of 110 million yuan, an increase of 35.3% over the same period last year. The growth rate of return net profit is higher than that of revenue, mainly due to the investment income of 89 million yuan confirmed by the company's equity disposal in the past 20 years, an increase of 75 million yuan over 19 years.
The large trading business is growing steadily, and the large asset management business is expected in the future. In the past 20 years, the company has confirmed that the dual-main strategy of "big deal + big asset management" is advancing steadily:
1) transaction service business: the agency business has grown steadily and Internet + 's business revenue has increased significantly. In the past 20 years, the revenue of the trading service business was 4.779 billion yuan, an increase of 11.43% over the same period last year, accounting for 72% of the total revenue, which is still the largest basic set of the company. Among them, the revenue of agency sales business reached 2.995 billion yuan, an increase of 4.92% over the same period last year, mainly due to the company's active promotion of key customer strategy and the sale of Shanghai Gengli Co., Ltd., which has exclusive cooperation clauses, to get more traffic. Internet + 's business realized revenue of 1.584 billion yuan, a sharp increase of 30.91% over the same period last year, mainly affected by the company's integration of online and offline resources and widening channels.
2) Asset management business: the area of property management is increased, and the resources of controlling shareholders are expected to develop in the future. In the past 20 years, the company's asset management income reached 665 million yuan, an increase of 3.71 percent over the same period last year, of which the property management business had 5.57 million square meters under management by the end of the year, a net increase of 709,000 square meters, and annual revenue of 632 million yuan, an increase of 6.48 percent over the same period last year. Considering that the large asset management business relies on the Guangdong-Macao deep cooperation zone and undertakes Dahengqin resources, it has successfully carried out urban asset management business in Ganzhou and Nankang, and its future development is expected to enter the fast track.
3) Post-transaction services and asset operation services: revenue declined due to the adjustment of business structure and the epidemic situation.
In 2020, the income from financial services was 245 million yuan, down 48.56 percent from the same period last year, while the income from the decoration business was 117 million yuan, down 56.03 percent from the same period last year. Among the asset operation services, the income of apartment management business reached 546 million yuan, down 11.24% from the same period last year, while the operating revenue of industrial and commercial assets was 267 million yuan, down 5.47% from the same period last year.
Unload the burden and travel light, and the fundamentals are expected to continue to improve. During the reporting period, the company divested the medium-asset model of long-rent apartments, focusing on light asset operation, and the drag on performance will be reduced; at the same time, the company divested 800 million small loan assets in 2020, and its cash flow and debt ratio improved. The company continues to unload its baggage, travel light, continue to transform, and profitability is expected to continue to improve.
Investment advice: the company is light and continues to transform, and the fundamentals have been reversed. According to the annual report, we estimate that the EPS for 21-22 will be 0.20 yuan and 0.24 yuan respectively, and according to the closing price on April 2, the PE will be 22 times and 18 times respectively, maintaining the "buy" rating.
Risk hint: trading services business continues to decline, light asset transformation is too slow