Event
The company achieved an income of 4.28 billion yuan in 2020, an increase of 17% over the same period last year, a net profit of 490 million yuan, an increase of 93% over the same period last year, a non-parent net profit of 450 million yuan, an increase of 84% over the same period last year, and a cash dividend of 3 yuan for every 10 shares, with a dividend rate of 48.6%.
The company expects Q1 to achieve a net profit of 0.4-50 million yuan in 2021, an increase of 594 percent over the same period last year.
Main points of investment
Revenue reached an all-time high in 2020; net profit increased significantly; orders on hand reached an all-time high in 2020, and profits increased steadily; except for the first quarter affected by the epidemic, revenue in the second to fourth quarters increased by about 30% compared with the same period last year, leading the industry in growth; the total sales of escalators reached 29000 units in the whole year, + 11% year on year, accounting for 78% of the total revenue Among them, vertical elevator sales reached 26000, year-on-year + 15%, corresponding income 2.7 billion yuan, year-on-year + 19%; escalator sales 3000, corresponding income 590 million yuan, year-on-year-11%, related to the longer implementation cycle of rail transit projects; the revenue share of installation and maintenance business increased by 2.38 pct. To 13.8%.
The company promotes the reform and optimization of the system and mechanism, continues to release business vitality, strategic customer cooperation and orders continue to improve, and execute orders of 6.71 billion yuan on hand (not including winning bids but have not yet received deposit orders of 513 million yuan, a total of + 14.5% compared with the same period last year). There are 19 lines of winning high-speed rail and rail transit projects, with a total amount of 710 million yuan, reflecting the competitive advantage of rail transit market segments.
In Q1 in 2021, the company's effective orders continued to transform, and its operating income increased steadily, and its net profit increased from 30 million yuan to 50 million yuan in 2019, equivalent to a compound annual growth rate of about 15% and 30%.
The operating quality has been effectively improved, all operating indicators have been improved, and the single-quarter gross profit margin has fluctuated. The company's comprehensive gross profit margin in 2020 has been increased by 30.7%, an increase of 0.8pct. the company has achieved results in reducing cost and increasing efficiency; the operating efficiency has been improved, and the expense rate has decreased by 3 pct.; compared with the same period last year. To 12%, profitability is expected to further improve; the net cash flow of operating activities is 790 million yuan (+ 88%), the best level in history, and the operation is sound; accounts receivable is 710 million yuan, down 18% from the same period last year; inventory turnover is 5.5 times, an increase of 1.1 times over the same period last year; weighted ROE is 16.5%, + 8.2% compared with the same period last year.
The company's profit margin fluctuated sharply in the single quarter of 2020, and Q4 gross profit margin fell 8.7 pct. compared with Q3. To 25.8%, the main reasons for the pressure on gross profit margin are: 1) the implementation of the new income criteria, transportation costs, after-sales service costs are reclassified into operating costs; 2) it is greatly affected by the rising prices of raw materials. The company uses the improvement of comprehensive efficiency and the large-scale effect of order growth to absorb some of the impact of the increase in raw material prices, and effectively controls the fluctuation of material costs throughout the year by signing a bulk purchase plan for raw materials. Q4 operating profit margin still increased by 5.4 pct. compared with the same period last year.
The elevator market demand is steady, the company continues to invest high R & D investment to enhance competitiveness, and the market share continues to rise. with the promotion of infrastructure construction such as real estate, rail transit and old reform, the replacement demand for new real estate opening and stock market renewal in the lower reaches supports the sustained and steady development of the elevator industry. It is expected that the overall elevator sales in 2020-2025 are expected to reach an average annual compound growth rate of 9%. In 2021, the sales volume of the whole elevator is expected to exceed 1.1 million units. The company revolves around the product leading strategy, continuously high R & D investment, accounting for 4.2%, and has a strong market response ability in new product development, new technology application, customer differential design and other aspects. We will steadily promote investment in various industries. The company's market share is expected to continue to increase.
Profit forecast and valuation
The prosperity of the elevator industry is expected to continue in 2021, and the company's market share and profitability are expected to further improve. From 2021 to 2023, the company is expected to achieve a net profit of 5.8 million yuan, an increase of 20%, 18%, 14%, 0.73, 0.86 and 0.99 yuan, respectively, from 2021 to 2023, with a "buy" rating maintained, corresponding to the current PE, which is several times higher than that of 14-12-10.
Risk tips: real estate infrastructure investment is lower than expected; steel prices have risen sharply; elevator safety accidents.