Annual report 2020 and quarterly report 2021: operating income 59.78 billion yuan in 2020, YoY+13%; net profit 190 million yuan, YoY+267%; deducting non-return net profit 8 million yuan, YoY-95%. The operating income of 2020Q4 is 16.23 billion yuan, the net profit of YoY+4; is 100 million yuan, and the net profit of YoY+397%; is 110 million yuan, YoY-22%. In 2021 Q1, the company's operating income was 19.96 billion yuan, and YoY+39%, increased by 96% compared with 2019Q1; the net profit of YoY-85%, decreased by 17% compared with 2019Q1, while the net profit of YoY-85%, decreased by 17%; after deducting 3 million yuan of net profit, YoY+103%, decreased 79% compared with 2019Q1.
The sales revenue of communication products is growing rapidly, and the revenue in 2020 is basically in line with expectations: as the core business, 2020H2's sales revenue of communication products reached 28.16 billion yuan, and YoY+24.9%, picked up obviously.According to the annual report, the proportion of Apple's brand business has increased and it has become the largest supplier of Apple on the JD.com platform; Huawei stores have created an interactive consumption experience, and the contribution of individual stores has continued to increase. By 2020, overseas distribution business has been distributed in 30 countries, Huawei overseas business annual sales of 3.7 billion yuan, YoY+100%.
2020H2 e-commerce and retail revenue of 1.5 billion yuan, YoY-77%, 's Nengliang e-commerce platform Fangpaduo and brand Apple cooperation stagnant impact, with the increase of the cooperative brand-SPU, is expected to gradually stabilize.
Profit improvement in peak season: new high-end mobile phones were launched in the second half of 2020, and the company ushered in the peak sales season.
The gross profit margin of 2020H2 communications products reached 2.1%, a slight increase of 0.1 pct compared with the same period last year; the company's gross profit margin reached 3.0%, although it increased 0.3pct month-on-month compared with the first half of the year due to a slight decline in the high base of 2019Q4 compared with the same period last year.
Under the effective control of the expense rate, the period expense rate is 2.6%, which is 0.6% lower than the same period last year, and the net interest rate of the company 2020Q4 is 0.6% lower than the same period last year, which increases 0.4pct.
Extension investment to seize the opportunity: in November 2020, Tianyin Communications, a wholly-owned subsidiary of the company, participated in the investment in the establishment of Star Alliance Information, with an initial subscription of 24 million yuan, accounting for 1.74% of the total, and then plans to invest an additional 500 million yuan with its own funds. in order to complete the joint acquisition of Glory Brand-related business assets, will have a synergistic effect with the brand.
Explore diversified business opportunities: 2020 accelerated layout of new retail business, its own chain brand "Yi Xiu Tesco"
Mobile phones as the center, the layout of digital perimeter, mobile phone maintenance, recycling, operation and other one-stop services, effectively improve product linkage, is expected to form a new growth point. At present, some atomized e-cigarette products have entered the offline channel of "easy repair and Tesco". According to the well-known e-cigarette brand Platinum official WeChat, in April 2021, Platinum has cooperated with the company in the offline retail scene to explore the form of mobile phone stores to sell e-cigarettes, combined with the Platinum "Thousand City Wandian" plan, the company's related business is expected to develop rapidly.
Investment advice: the company's smart terminal sales continue to promote, retail e-commerce non-mobile phone business thrives.
It is estimated that from 2021 to 2023, the EPS of the company will be 0.18 pounds 0.21 yuan 0.23 yuan respectively, maintaining an overweight-B rating.
Risk hint: the recovery of e-commerce retail is not as expected, and the lottery business is not as expected.