2020 interim results: the company's 2020H1 operating income was 259 million yuan, down 47% from the same period last year, and the net profit returned to the mother was-23.3 million yuan. Of this total, the operating income of Q2 was 158 million yuan, down 19% from the same period last year, an increase of 57% from the previous month, and the net profit returned to the mother was-8.59 million yuan, significantly narrower than the loss of-14.71 million yuan in Q1. The main reason is the impact of COVID-19 epidemic, resulting in a significant slowdown in bottle cap and garden business.
Bottle cap business: from tradition to Internet +. The main products include composite anti-counterfeiting printing aluminum plate, aluminum anti-counterfeiting bottle cap and combined anti-counterfeiting bottle cap, with an annual output of more than 2.5 billion and a market share of more than 10%, ranking first in the industry. The products have been sold to 28 provinces, autonomous regions and municipalities directly under the Central Government, and there are more than 700 customers in the downstream beverage industry, which are mainly used for the packaging of liquor, health wine, beer, wine, olive oil, high-grade mineral water, medicine, cosmetics and other industries. The ordinary bottle cap market has shown a competitive pattern in the Red Sea, and the company will make breakthroughs and transformation in two aspects in the future: on the one hand, it will focus on developing high value-added bottle cap business by making use of the advantages of high-end raw materials, high-end equipment and market share; on the other hand, it is organically combined with the Internet by collecting anti-counterfeiting data through QR code. The main functions of the QR code intelligent bottle cap are anti-counterfeiting, points redemption, anti-channeling, advertising and big data analysis, which will change the production, operation, sales, warehousing, logistics, market incentives and other links of the traditional wine industry. at the same time, it will bring new consumption experience to consumers and new production revolution and profit growth points for the company's production plants.
Garden business: recovery of cash flow. In recent years, the state has adjusted its policy on PPP projects, while the financing policies of financial institutions for private enterprises have been continuously tightened, and the early implementation of PPP projects requires a large amount of money, which affects the company to actively respond, adjust production and operation plans, and slow down the construction progress of some projects according to funds and financing. In the special external environment, in recent years, the company has gradually adjusted the internal management structure, took the initiative to shrink the scale of garden projects, and increased the collection of project rebates.
Performance will gradually improve, "increase" rating. Affected by the epidemic, the performance of H1 must be at a loss, but Q2 has improved month-on-month. With the relief of the epidemic, downstream demand is expected to enter a period of recovery.
At the same time, the company will use the QR code anti-counterfeiting bottle cap as the data carrier, Internet +, is expected to improve the upstream and downstream ecology, and the collection of garden business will also greatly improve the company's cash flow. To sum up, we expect the company's 2020-2022EPS to be 0.03 2022EPS 0.08, 0.11 yuan, respectively, and the corresponding PE is 89-37-27 times, giving the "overweight" rating.
Risk hint: the project did not advance as expected; COVID-19 's epidemic situation worsened more than expected.