Events:
Company announcement 2020 Annual report: in 2020, the company achieved revenue of 1.028 billion yuan, down 1.69% from the same period last year; net profit from home was 239 million yuan, down 16.22% from the same period last year; and net profit from non-return was 223 million yuan, down 17.23% from the same period last year.
Main points of investment:
Overseas income is growing steadily and cash flow is excellent. Smart express cabinets are the company's main products. In 2020, the company's revenue from intelligent express cabinets was 939 million yuan, down 3.28% from the same period last year, accounting for 91.33% of the company's total revenue. In 2020, the company's domestic business was affected by the epidemic, while Fengnest adjusted its equity structure and slowed down the distribution of express cabinets. The company's domestic income was 320 million yuan, down 34.32% from the same period last year. In 2020, the company's overseas revenue was 672 million yuan, an increase of 24.26% over the same period last year, including 524 million yuan from Amazon, an increase of 15.4% over the same period last year, accounting for 50.93% of the company's revenue. In 2020, the company's overall gross profit margin was 48.31%, an increase of 0.47pct over the same period last year. The rates of sales expenses, management expenses, R & D expenses and financial expenses were 12.42%, 3.26%, 6.82% and 0.81% respectively, with year-on-year changes of + 0.31pct,-0.33 pct, + 1.78 pct and + 2.27 pct respectively. The increase in financial expense rate was mainly caused by a substantial increase in exchange losses. The company has excellent cash flow, with a net operating cash flow of 272 million yuan in 2020, accounting for 26.47% of operating income and 114% of net profit.
The expansion of new products and new customers has been very effective, opening the second growth pole. In 2020, the company has successfully expanded its new markets, new products and new customers. In terms of products, in addition to providing intelligent express cabinet products for the logistics industry, the company also provides vending machines, fresh cabinets and other products for the retail industry, intelligent dining cabinets for the takeout industry, and recharging cabinets for the power grid industry. The sales of the company's freezers, newspaper boxes and other new products were fruitful in 2020. In 2020, the company's revenue from intelligent thermostat, selling equipment and other customized intelligent interactive devices reached 31.38 million yuan, a substantial increase of 96.5% over the same period last year. In terms of customers, the company's overseas non-Amazon revenue in 2020 was 126 million yuan, a sharp increase of 44.8% over the same period last year. Sales revenue in Europe surpassed that in North America for the first time, and sales revenue in Asia and Southeast Asia also increased to a certain extent. According to the company's business plan, the company will increase the allocation of R & D personnel in the field of medical care and smart takeout, and the company will open the second growth pole.
It is optimistic that the delivery speed of Fengnest intelligent express cabinets will be accelerated. After experiencing the rapid expansion in the early stage, the express cabinet operators of Fengnest and China Express have slowed down the deployment of express cabinets since 2019, with the main task of improving the profitability of existing express cabinets, and the year-on-year performance of capital expenditure is not good. In April 2020, Fengnest opened and charged for overdue pickups; in May, Fengnest and Express announced their restructuring; and in January 2021, Fengnest raised an additional $400 million. At present, the competition pattern of express cabinet operators is basically stable, Fengnest's leading position has been further strengthened, a new round of financing has been successfully landed, and client overdue charges have improved profits and cash flow levels. we believe that starting from 2021, Fengnest may speed up the deployment of express cabinets, and Zhilai as a core supplier of Fengnell will benefit significantly.
Profit forecast and investment rating: maintain the "buy" rating. The company's performance in 2020 has been affected by the epidemic and the reduction in investment in Fengnest, and the stock price has experienced a deep correction. Fengchao hopes to increase the delivery of express cabinets in 2021, while the company's new products, new customers and new markets expand smoothly. We estimate that the EPS of the company from 2020 to 2022 will be 2.04x2.56x3.00 respectively, and the corresponding share price will be PE in 15-12-10. The current valuation of the company is in the bottom range, with strong certainty of future performance growth and maintaining a "buy" rating.
Risk tips: 1) the risk that the capital expenditure of Amazon and Fengnest falls short of expectations; 2) the risk that the company's new products and new customers are not as expected; 3) the risk that the company's performance falls short of expectations; 4) systemic risk.