Event: the company announces its annual report in 2020.
The operating performance was beautiful, and the net profit increased by 6.23%. In 2020, the company realized operating income of 4.889 billion yuan, an increase of 146.00% over the same period last year; net profit belonging to shareholders of listed companies was 300 million yuan, an increase of 6.23% over the same period last year; and diluted earnings per share was 0.23 yuan, an increase of 9.52% over the same period last year.
Real estate projects enter the settlement cycle and are the main source of income. From a sub-industry point of view, real estate sales are the main contributors, with operating income of 4.589 billion yuan, accounting for 93.85% of business income, an increase of 157.29% over the same period last year. Sanxiang impression residence in Shanghai, Haishang Cloud residence in Sanxiang, and Haishang View residence in Hangzhou entered the settlement cycle.
We will steadily develop cultural business and speed up the return of funds. In 2020, the business income of the cultural and performing arts sector was 159 million yuan, accounting for 3.24%, an increase of 116.02% over the same period last year. The previously signed "impression Taiji" and "the most memorable Shaoshan Chong" are expected to have its premiere in 2021. During the reporting period, combined with the deepening of the tourism industry and the development trend of multi-format integration, the company actively expanded more than 30 projects, and some projects are expected to be signed in 2021. Among the cultural projects invested by the company, Mango Square is expected to be fully completed in 2021, and the Wellcome Golden staff project will be withdrawn. The Chinese Culture Phase II (Shanghai) Equity Investment Project Fund has completed the investment of Shanghai Xiaoguo Culture Media Co., Ltd., Shanghai Kanbang Information Technology Co., Ltd., Gauss Education Co., Ltd., Shanghai Nai'erbao Enterprise Management Co., Ltd., Chongqing Hongjiu Fruit Co., Ltd., CloboticsHoldings Limited and other head advantage projects.
Profit margins have declined significantly, with three red lines in green. In 2020, the company's gross profit margin was 14.95%, down 21.42% from the same period last year; the net profit margin was 6.13%, down 8.06% from the same period last year. In terms of different industries, the gross profit margin of the culture and performing arts industry was 62.88%, up 18.24% from the same period last year, and the gross profit margin of the real estate sales industry was 12.91%, down 24.71 percentage points from the same period last year. By the end of the reporting period, the company's asset-liability ratio excluding accounts received in advance was 34.31%, down 6.21 percentage points from the same period last year; the net debt ratio was 2.36%, down 38.77 percentage points from the same period last year; and the cash-to-short-debt ratio rose from 1.53 at the beginning of 2020 to 1.63 at the end of 2020.
Investment advice: maintain a "neutral" rating. We predict that the total operating income of the company in 2021 and 2022 is about 5.45 billion yuan and 5.918 billion yuan respectively, and the net profit belonging to the owner of the parent company is 410 million yuan and 465 million yuan, respectively, and the corresponding EPS is 0.33 yuan and 0.38 yuan respectively. According to the company's closing price of 4.16 yuan on April 29, 2021, the PE in 2021 and 2022 is 12.43,10.97 times. We give the company 13-15 XPE in 2021, with a reasonable value range of 4.35 to 5.02 yuan, keeping it "neutral".
Rating. Risk tips: 1) the sales and settlement of real estate development business are not as expected; 2) the promotion of the company's cultural business is not as expected.