Event: the company released the 2020 annual report, with revenue of 1.136 billion yuan during the reporting period, an increase of 26.43% over the same period last year, a net profit of 162 million yuan, an increase of 51.42% over the same period last year, and a net profit of 129 million yuan after deducting non-return, an increase of 30.12% over the same period last year. The company also released its quarterly report for 2021, with revenue of 134 million yuan, an increase of 85.71% over the same period last year, and net profit of-37 million yuan, an increase of 19.16% over the same period last year.
The main industry continued to advance, and medical electronic bills accelerated: in 2020, the company's software development and sales revenue reached 275 million yuan, an increase of 10.97% over the same period last year; on the other hand, the company's technical services revenue reached 779 million yuan, an increase of 36.31% over the same period last year. During the reporting period, the company accelerated the promotion of products represented by financial electronic bills, financial management, government procurement platform and so on. Among them, the financial electronic bill business has covered the Ministry of Finance and 28 provinces, with a total of nearly 3000 hospitals above the second grade; in terms of non-tax payment, the non-tax electronic reform has covered 22 provinces. The company's comprehensive gross profit margin was 63.55%, slightly lower than in 2019.
The expense rate is properly controlled and the cash flow maintains high quality: the company continued to increase its marketing and personnel investment in 2020, resulting in a year-on-year increase of 13.64% and 22.78% in sales and management expenses, respectively, but accounted for 15.25% and 14.22% of revenue, compared with 2019. On the other hand, the company's net operating cash flow was 185 million yuan, an increase of 61.18% over the same period last year, and the proportion of net profit was 1.14%, which continued to maintain a good performance quality.
The compound growth rate of revenue in the first quarter was 27.83%, which is still highly seasonal: in the first quarter of this year, the company achieved a relatively large increase in revenue, on the one hand, because the business affected by the epidemic was delayed in the same period last year, and at the same time, the main business was promoted in an orderly manner this year. The three-year compound growth rate reached 27.83%. As the company receives the impact of budget expenditure, there is still a strong seasonality, accounting for a relatively low proportion of the whole year in the first quarter.
Investment suggestion: based on the electronic bill in the past two years is at the peak of construction, the company at the same time in the public payment, government procurement and other areas of multi-faceted layout, and actively try SaaS and other innovative models. It is estimated that the EPS in 2021 and 2022 will be 0.74 yuan and 0.93 yuan respectively, with a buy-A rating.
Risk hints: (1) Electronic bills and personal income tax deduction policies do not meet expectations, (2) market competition risk.