The 2020 performance is in line with the performance KuaiBao, and the 1Q21 performance slightly exceeds the performance forecast. the company announces 2020 results: 2020 income 16.892 billion yuan, year-on-year-1.18%; return to the mother net profit 849 million yuan, year-on-year-13.42%. Corresponding to 4Q20 income 5.488 billion yuan, month-on-month + 21.55%; return to mother net profit 241 million yuan, month-on-month-15.26%. 1Q21 income 4.335 billion yuan, year-on-year + 58.18%, month-on-month ratio-21.02%; return to the mother net profit of 239 million yuan, year-on-year + 196.56%, month-on-month-1.18%, slightly exceeding the upper limit of the previously released performance forecast range of 233 million yuan. 1Q21 performance slightly exceeded the performance forecast, mainly due to the smooth progress of the European restructuring plan, which had a positive effect on 1Q21 operations.
Development trend
Affected by the global epidemic and overseas asset restructuring, profitability is under pressure in 2020, and the performance of 1Q21 is strong. The 2020 gross profit margin is 19.10%, year-on-year-0.93 ppt, of which 4Q20 gross profit margin is 18.12%, year-on-year-2.11ppt. The decline in gross profit margin is mainly due to the adjustment of accounting standards, and the transportation expenses originally included in sales expenses are included in the cost, which is a drag on the level of apparent gross profit margin. After excluding this part of the effect, the gross profit margin is robust. The net interest rate of homing in 2020 is 5.0%, compared with the same period of last year. The net interest rate of 1Q21 is 5.5%, which is + 2.57ppt compared with the same period last year. The net profit of homing of 1Q21 is 239 million yuan compared with the previous year, which is + 196.56% compared with the same period last year. The company implemented the "European restructuring Plan" in 2020, resulting in one-time restructuring costs and asset impairment losses due to layoffs and relocation. In 2020, the company raised a total of 297 million yuan in asset impairment losses. We believe that as the restructuring plan draws to a close and the impairment risk is manageable in 2021, profitability is expected to pick up.
The cash flow is sound, with a cash dividend ratio of 36.86% in 2020, in line with the company's previously released shareholder return plan. The company will strengthen cash flow management, with operating cash flow of 2.87 billion yuan in 2020, + 42.8% over the same period last year. In 2020, the asset-liability ratio is 38.74%, the level of interest-bearing liabilities is low, and the financial expense rate in 2020 is only 0.1%. The company expects to pay a dividend of 313 million yuan, and cash dividends account for 36.86% of the net profit, which is in line with the shareholder return plan previously released by the company. We believe that after raising funds to replenish liquidity, the company is expected to further enhance its profitability and anti-risk ability, while actively giving back to shareholders to reflect the value of long-term investment.
European business restructuring is nearing completion, with greater certainty of medium-and long-term performance. The company expects the restructuring to be completed in 1H21 and the Romanian plant will make a positive contribution to the company's performance. In the thermoforming business, Changchun Huaxiang performed well in 2020, and the company's thermoforming business performance was gradually realized; in the short term, we expect the company, as the exclusive supplier of FAW-Volkswagen thermoforming, to enjoy super-industry growth through in-depth matching; in the medium and long term, the company's thermoforming products have strong technical advantages and are expected to seize the important opportunity of industry change under the dual logic of lightweight and thermoforming domestic substitution.
Profit forecast and valuation
Keep profit forecasts for 2021 and 2022 unchanged. The current share price corresponds to a price-to-earnings ratio of 9.1 / 7.6 times 2021 / 2022. Maintain an outperform industry rating and a list price of 21.00 yuan, corresponding to 11.0 times 2021 price-to-earnings ratio and 9.2 times 2022 price-to-earnings ratio, which has 21.6% upward space compared with the current stock price.
Risk
The development of overseas business and thermoforming business is not as expected.
