Description of the event
The company disclosed annual report & quarterly report: In 2020, the company achieved operating income of 252,296 billion yuan, a year-on-year decrease of 6.29%, achieved net profit of 4.275 billion yuan, a year-on-year decrease of 14.118 billion yuan, realized vested non-net profit of -6.807 billion yuan, a year-on-year decrease of 1,096 million yuan, and realized net cash flow from operating activities was -1,622 billion yuan, an improvement of 16.243 billion yuan over the previous year. 2021Q1 achieved revenue of 54.05 billion yuan, a year-on-year decrease of 6.63%, achieved net profit attributable to 456 million yuan, an increase of 182.8% over the previous year, and realized net profit of -938 million yuan, a year-on-year decrease of 87.49%.
Incident comments
After the impact of the epidemic, sales gradually eased, the company's quarterly revenue was corrected, and operating cash flow improved dramatically over the same period last year.
In 2020, the company achieved a 6.29% year-on-year decline in revenue. Among them, Q1/Q2/Q3/Q4's single-quarter revenue changes were -7.07%, -17.38%, -4.58%, and 4.71%. The company already achieved revenue growth in the fourth quarter alone. Corresponsively, it is estimated that the company's overall sales scale increased 19% year on year in the fourth quarter alone. Among them, online scale increased 30% year on year and offline scale decreased 2% year on year. During the reporting period, the gross margin of the company's main business fell 4.02 percentage points year on year, the sales expense ratio fell 2.26 percentage points year on year, the management expense ratio increased slightly by 0.02 percentage points, and the financial expenses ratio fell 0.05 percentage points year on year. Overall, the company's annual net profit deducted by -6.8 billion yuan. Among them, due to the obvious decline in gross margin due to online scale expansion in the fourth quarter, attributable net profit was -5.8 billion yuan; at the same time, the company optimized accounts and payment methods, strengthened supplier cooperation, and improved operating cash flow by 16.2 billion yuan year-on-year.
The company embarked on a quality-first development path, focusing on a business system conducive to long-term development, and revenue growth slowed in the short term.
2021Q1 achieved a revenue growth rate of 6.63% year-on-year. The company's revenue growth rate fell 7.07% year-on-year due to the epidemic in the same period last year. Under a relatively low base, the company's revenue growth rate slowed down. The core was: 1) The company drastically reduced subsidies and promotion of such products, causing the sales scale of online platform products to drop 18.82% year-on-year in the first quarter; 2) offline business, 3C Home and Life specialty stores (excluding supermarkets), comparable store sales revenue increased 18.91% year-on-year; 3) The company's retail cloud continued to develop in the first quarter, opening 584 new stores. Sales volume increased 69% year over year. At the same time, due to short-term adjustments in the business structure, the company's gross margin fell 1.57% year on year, but it has improved markedly from month to month. Expense control continues to be strengthened. Sales expenses fell 11.84% year on year, management expenses increased 10.83% year on year, and the consolidated company's operating profit (gross profit - sales tax - sales expenses - management expenses) achieved a profit of 76.03 million yuan during the reporting period. The future may usher in a continuous increase in the center.
Investment advice: The company's supply chain and logistics resource base is consolidated, and the company is upgrading from a retailer to a retail service provider, hoping to open up new growth space. At the same time, the company is paying more attention to quality development. Operating efficiency has been greatly improved year over year, and profitability is expected to increase. The current market capitalization corresponds to the 2021 revenue forecast PS by only 0.2 times, maintaining the “buy” rating.
Risk warning
1. The recovery in terminal consumption was relatively slow after the impact of the epidemic;
2. The market is expanding rapidly, and capital expenditure is more difficult to manage.