2Q performance is in line with market expectations
Yingfei Storage announced 1H performance: operating income of 326 million yuan (- 17%YoY), declining because the ① epidemic affected the progress of the project, the proportion of automation system integration projects with a longer ② acceptance cycle increased. The return net profit is 60 million yuan (+ 3%YoY, corresponding to 0.20 yuan per share), the net profit margin is 18.3% higher than the same period last year, and the non-return net profit is 49 million yuan (- 5%YoY), which is basically in line with market expectations. 1H the net inflow of operating cash flow is 54 million yuan, compared with the net outflow of 31 million yuan from 1H19, the company's business payback ability is enhanced.
In a single quarter, 2Q's operating income was 237 million (- 8%YoY), gross profit margin fell 4.1ppt to 29.3% year-on-year, net profit was 41 million yuan (- 6%YoY), net profit margin increased 0.3ppt to 17.4% year-on-year, net operating cash flow inflow was 41 million yuan, compared with 17 million yuan net inflow in the same period last year.
Trend of development
The company's order reserve is growing well. The company added nearly 700 million yuan of new orders in the first half of 2020, an increase of 56% over the same period last year. The order source industries are mainly intelligent manufacturing system integration (+ 168%YoY), logistics system integration (+ 46%YoY), medical and pharmaceutical industry (+ 1237%YoY, short-term demand growth due to the epidemic outbreak), agricultural products and cold chain industry.
The controlling shareholder was changed to Jingdezhen Tao Wenlun Group, paying attention to the business synergy between the two sides: in June, the company's controlling shareholder was changed to Tao Wenlun Group (holding 30% equity), and the actual controller was changed to Jingdezhen SASAC. Tao Wen Travel Group provides the ceramic industry chain business flow for the company, and the company provides intelligent logistics and information flow support for the ceramic manufacturing industry, so as to expand its business scope and produce synergy.
The first phase of the Maanshan plant will be put into production. Maanshan project, with a total investment of 1 billion yuan, is the company's largest production base in the country. At present, the first phase of the plant and supporting facilities have completed the main acceptance, and will soon be put into production. We expect that when the project is fully completed, it will add 100000 tons of production capacity, which is expected to contribute 1 billion yuan in income and 130 million yuan in net profit.
Profit forecast and valuation
For the time being, we maintain the company's 2020 31%YoY profit forecast of 88 million yuan (+ 13%YoY) / 115 million yuan (+ 31%YoY). The current share price corresponds to a price-to-earnings ratio of 37.1 times 2021 / 28.4 times earnings. We maintain a neutral rating and a target price of 10.00 yuan, corresponding to 34.0 times 2020 price-to-earnings ratio and 26.1 times 2021 price-to-earnings ratio, which is 8.3% lower than the current share price.
Risk
The epidemic lasted longer than expected and steel prices fluctuated sharply.