2020 and 1Q21 performance are in line with expectations
The company announces the results of 2020 and 1Q21: 1) the income in 2020 is 1.216 billion yuan, the net profit of YOY+8.07%; is 172 million yuan, and the net profit of YOY+26.23%; is 66 million yuan, YOY-35.54%. 2) the income of 1Q21 is 204 million yuan, the net profit of YOY+52.98%; is 20 million yuan, and the net profit of YOY+15.89%; is 13 million yuan, YOY-11.38%. The results of FY20 and 1Q21 are in line with our expectations.
Radar business maintained good growth, while the growth rate of other businesses was stable or declining. 1) the company's radar business revenue in 2020 was 384 million yuan, an increase of 43.16% over the same period last year, and the gross profit margin increased to 45.77% over the previous year. We believe that the main reason is that the batch delivery of special millimeter wave radar was completed this year. 2) the revenue of satellite application business was 495 million yuan, an increase of 6.05% over the same period last year; the revenue of intelligent control business and secure storage business decreased by 14.53% and 14.70% respectively compared with the same period last year; and the revenue of intelligent network connection service was added to achieve revenue of 6.0719 million yuan.
The profitability increased slightly and the cost increased during the period. 1) the overall gross profit margin of the company in 2020 was 44.5%, an increase of 0.9 ppt over the previous year, and the net profit rate was 14.2%, an increase of 2.1ppt over the previous year.
2) the total cost of the company in 2020 was 406 million yuan, an increase of 25.43% over the same period last year, and the expense rate was 33.39%, an increase of 4.62ppt over the previous year. Among them, the sales expense rate decreased from 0.15ppt to 2.25% over the previous year, and the management, R & D and financial expense rates were 15.56%, 12.67% and 2.91% respectively, increasing 1.27ppt, 1.83ppt and 1.67ppt respectively over the previous year.
Net cash outflow from operating and investment activities, while cash flow from fund-raising activities is positive. 1) the company's active stock preparation led to the net cash outflow of operating activities in 2020, which was-43.1264 million yuan; 2) the acquisition of shares in Eccot, the net cash outflow of investment activities was-240 million yuan; and 3) the net cash flow inflow of fund-raising activities was 337 million yuan after issuing convertible bonds.
Trend of development
Business diversity continues to increase, forming an internal synergy advantage. 1) the company has traditional advantages in radar technology, and we believe that with the acceleration of information construction in specific areas of the country, the company's special radar products are expected to grow rapidly. 2) the company plans to continue to integrate relevant technologies in the industrial chain through mergers and acquisitions and foreign investment in 2021, which will further strengthen the layout of different places, facilitate the synergy of internal business and achieve profitable and high-quality growth.
Profit forecast and valuation
We keep the profit forecast for 2021 unchanged, forecasting a net profit of 200 million yuan and introducing a net profit forecast of 230 million yuan for 2022. The current stock price corresponds to 2021 / 2022 39.9x/34.7x Pink E. We maintain the neutral rating and the company's target price of 7.12 yuan, corresponding to 2021 44.6x/38.8 2022, with a potential upside of 11.77%.
Risk.
Radar business development is not as expected; orders and delivery are not as expected.