Event: according to the annual report, the company achieved 1.29 billion yuan in operating income in 2019, an increase of 29% over the same period last year, and a net profit of 160 million yuan, an increase of 19% over the same period last year. Comments are as follows:
1. The manufacturing end is growing rapidly, the investment operator is beginning to contribute income, and the company's two-round strategy is emerging. a. The smart parking garage plate continues to maintain a state of high growth. In 2019, the sales of smart parking garages were 63800, up 31.8% from the same period last year. The sector achieved revenue of 817 million, an increase of 31.5% over the same period last year. In recent years, taking advantage of the industry's Dongfeng, it has maintained a rapid growth rate, with a compound growth rate of 22.9%. b. The parking operation sector began to contribute revenue. Annual revenue of 5.17 million, the company's "intelligent manufacturing" and "investment and operation" two-wheel drive strategy has initially taken shape! c.
Other manufacturing sectors maintained steady growth. Automated production lines achieved revenue of 206 million, up 19.1 percent over the same period last year; warehousing and logistics 114 million, up 2.5 percent over the same period last year; and concrete mixing stations, 114 million, up 50.1 percent over the same period last year.
2. The expense side remained stable, and the profit decreased slightly. a. Profitability declined slightly. The net interest rate was 11.84% in 2019, down 1 percentage point from 2018. One is that the overall gross profit margin has declined, affecting 0.7 percentage points, and the other is the loss of credit impairment and the slow rebate of government projects, which affects 0.6 percentage points. b. The cost is effectively controlled. During the period of the company, the expense rate was 187.76%, which decreased by 1.23pct. Among them, the sales expense rate and management expense rate decreased by 0.58pct/1.08pct respectively compared with 2018. c. Other operating indicators remained stable. For the whole year, the net inflow of operating cash was 22.82 million yuan, and the days of inventory turnover increased slightly to 157days, while the turnover days of accounts receivable decreased slightly to about 199days.
3. Be optimistic about the company's medium-and long-term logic: a. There is a large gap between supply and demand of parking spaces, and the market of mechanical parking garages has a bright future. There is a serious mismatch between car ownership and parking space construction in China, and there is still a big gap in the proportion of parking spaces and vehicle ownership between domestic cities and international cities. In addition, the land utilization rate of mechanical parking garage is high, which is an effective way to solve the problem of urban parking. b. When the policy is mentioned again, the acceleration of the industry can be expected, and the head enterprises will fully benefit. In recent years, the central to local governments have issued a series of policies to promote industrial development, and the industry is expected to enter the second round of accelerated development period.
c. The company is actively transforming to parking operation service, and its flexibility can be expected in the future.
Investment advice and rating: the company's 2020-2022 net profit is expected to be 260 million / 350 million / 460 million, corresponding to the PE of 18 times / 13 times / 10 times, given a "buy" rating.
Risk hint: the development of parking operation business is not as expected; a major shift has taken place in industrial policy.