Event: the company disclosed its three-quarter report for 2020, and its overall performance continued to improve.
The company's 2020Q3 realized operating income of 470 million yuan (- 12.67%), and its net profit recorded a temporary loss of 20.4601 million yuan, of which the net profit after deducting non-return was 23.184 million yuan. The decline in revenue at the end of the company continued to narrow and improve compared with 2020H1 (- 22.91% last year).
The company's 2020Q1~Q3 achieved a cumulative operating income of 1.356 billion yuan (- 19.64%) and a net profit of 25.2627 million yuan (- 74.24%), of which the net profit deducted from non-return reached 14.0813 million yuan (- 85.02%).
Profitability: the company's gross profit margin during the Q3 period was 32.85%, slightly lower than the 20Q2 gross profit margin of 33.41%, and remained stable as a whole; the terminal net profit was affected by the increase in Q3 sales expenses and showed a temporary loss.
Operating capacity: the company's 2020Q3 inventory reached 674 million yuan (- 14.15%), the overall scale was reduced compared with the same period last year; at the same time, the turnover days of 2020Q3 inventory reached 235.91 days (+ 25.14 days), which was prolonged compared with the same period last year. In terms of accounts receivable management, the overall scale of accounts receivable of 2020Q3 Company reached 363 million yuan (- 6.41%), and the turnover period of accounts receivable reached 81.69 days (+ 17.23 days).
Expense rate: the company's 2020Q3 sales / management / R & D / financial rates reached 35.98% (+ 8.67pct) and 4.99% (+ 2.25pct) / 2.82% (- 3.88pct) / 1.97% (- 1.04pct) respectively, with a substantial increase in sales rates and an increase of 8.13pct compared with Q2, putting pressure on the company's terminal profits.
We believe that the overall profit of the company's 2020Q3 is mainly due to the initial cost sharing of the company's online "one house of good goods" platform and related channels; the rise of channel-side management fees leads to the increase of overall management fees. Based on the expansion of emerging channels in 2020, the company aims to achieve deep online and offline integration and launch live cooperation with head anchor Weiya. Combined with the objective situation, we conclude that the initial cost of channel construction drives up the company's sales rates and management fees; in addition, according to Taobao's third-party data, the company's online channel sales have achieved a rapid year-on-year growth of 184.52% since September. At the same time, with the launch of activities such as the promotion of 2020Q4 double 11 platform, the company's Q4 profit status is expected to continue to improve.
Cash flow: the net cash flow of the company's 2020Q3 operating activities reached 92.0573 million yuan (+ 59.69%), with a relatively fast growth rate, Q2 continued to rise month-on-month, and the company's cash flow continued to improve and more abundant.
To maintain the "buy" rating, taking into account the impact of the 2020H1 epidemic and the impact of research and development expenses on the profit side of Q3 channel, we appropriately downgrade the original forecast. We expect the company's revenue in 2020-2022 to be 24.10,27.07 and 2.855 billion yuan respectively, with year-on-year growth rates of-7.46%, 12.36% and 5.45% respectively. The net profit of homing in 2020-2022 reached 0.41,0.79 and 107 million yuan respectively (the original value in 2020-21 was 2.85 yuan and 391 million yuan), with year-on-year growth rates of-52.42%, 95.46% and 35.25% respectively, and the corresponding EPS reached 0.05,0.10 and 0.14 yuan respectively, and the corresponding P shock E was 96.48,49.36,36.50 times respectively.
Risk tips: online growth is lower than expected; raw material prices fluctuate; channel costs exceed expectations.