The company released its 2020 annual report on April 14 (updated). In 2020, the income was 1.328 billion yuan, down 18.02% from the same period last year; the total profit was 922 million yuan, down 3.93% from the same period last year; and the net profit from home was 773 million yuan, down 3.47% from the same period last year, deducting 662 million yuan from non-net profit, down 12.36% from the same period last year. Diluted EPS 1.03 yuan, return on net assets 13.86%. The operating cash flow per share during the reporting period is 0.27 yuan. The company announced a dividend plan for 2020, with 10 shares of 6.0 yuan (including tax).
Brief comments and investment suggestions.
1. Revenue fell by 18% in 2020, excluding rent reduction and office sales income, and the overall operation is sound. Revenue in 2020 was 1.328 billion yuan, down 18.02% from the same period last year, of which 1-4Q decreased by 9.42%, 31.96%, 8.71% and 18.59% respectively. Affected by the epidemic, the company reduced the rent and service charges of self-operated shopping malls / market tenants by about 103 million yuan in February (excluding tax). In addition, office sales revenue decreased by about 216 million yuan compared with the same period last year. Excluding the above two factors, the overall operation of the company is sound. By the end of 2020, the company operates its own store with 1.1 million square meters of self-owned property in the core business district of Chengdu, with more than 3000 merchants, and joins and manages 500,000 square meters of stores, distributed in Chongqing, Luzhou, Zigong and other cities.
Sub-regions: in 2020, the income of Chengdu / other parts of Sichuan Province and Chongqing / Yunnan accounted for 97.00%, 2.5% and 0.51% respectively, and the year-on-year growth rate of income was-18.83%, 23.83% and 7.33% respectively. Compared with 2019, the proportion of income in Chengdu decreased, while that in other parts of Sichuan and Chongqing increased. Sub-products: market leasing and service / marketing advertising and planning / entrusted management / decoration project revenue accounted for 84.74% 0.55% 1.15% 5.06% respectively, year-on-year increase of-9.65% picket 40.69% Acme 8.82% Accord 49.69%.
In order to further expand the fine decoration business of real estate, the company's holding subsidiary, Fusen Meijiannan, invested 10 million yuan to set up Chengdu Fushenmei Huachuang Decoration Design Co., Ltd. mainly to undertake the decoration and decoration design business of real estate residential projects, the decoration and decoration business developed well in 2020, with an increase of nearly 50%.
2. In 2020, the comprehensive gross profit margin increased by 0.79%, and the main gross profit margin increased by 0.26%. The comprehensive gross profit margin for the whole year was 67.55%, an increase of 0.79pct over the same period last year. Among them, the gross profit margin of the main business is 68.74%, the gross profit margin of other 0.26pct businesses is increased by 47.02%, and the 10.55pct is reduced.
Sub-regional, Chengdu gross profit margin 68.66%, an increase of 1.09 pct; other areas except Chengdu calculated gross profit margin of 31.61%, an increase of 4.10pct. Sub-product, market rental and service gross profit margin increased 1.7pct to 72.38%; marketing advertising and planning gross profit margin reduced 43.86pct to 3.41%; entrusted operation and management gross profit margin increased 11.03pct to 77.86%; decoration and decoration gross profit margin reduced 0.96pct to 10.70%. Finally, the gross profit margin of the main business increased by 0.26 percentage points to 68.74%.
3. During 2020, the expense rate increased 0.8pct, of which the sales expense rate increased 0.67pct. The expense rate during 2020 is 4.27%, an increase of 0.8pct over 2019, in which the sales / management / financial expense rate is 0.37% and 4.28% respectively, and the 0.22/0.45/0.14pct is increased respectively.
The increase in the rate of sales expenses is mainly due to the increased cost of business publicity due to the impact of COVID-19 's epidemic and the strengthening of brand promotion.
The amount of the share payment fee in the management fee is-4.86 million yuan, mainly because the restricted stock granted to 138equity incentive objects can not meet the exercise conditions in 2020 and one equity incentive object leaves. The restricted shares that have been granted but have not yet been lifted shall be cancelled by the company's buyback and rush back to the share payment confirmed in the previous year.
4. For the whole year, the net profit of returning home fell by 3.47%, and the profit growth rate became positive in the fourth quarter. The total profit realized in 2020 was 922 million, down 3.93% from the same period last year; the net profit returned to the home was 773 million yuan, down 3.47% from the same period last year, of which 1-4Q increased by-13.84%,-31.09%,-5.02% and 37.79% respectively. Profits began to improve in the third quarter and returned to positive substantially in the fourth quarter. For the whole year, non-net profit was deducted by 662 million, down 12.36% from the same period last year.
5. Innovate the format and integrate the supply chain.
(1) new business type: test the second growth curve of the development of new retail business, permeating the new consumer groups of the post-90s: the company established a wholly-owned subsidiary, Fusen New Retail, which is mainly aimed at the new consumers of the post-90s, using independent teams and independent mechanisms to build a new model of the home market, realize the restructuring and upgrading of offline formats, and create a new retail project that can be replicated offline and sold all over the country online. In December 2020, the company's first new retail self-run test store, the Animal Symphony Troupe, began operation.
(2) supply chain: cut into the fine decoration trillion market, the business is growing steadily. Relying on the advantages of Chengdu industrial belt, we will launch the strategy of "Fusenmei + Sichuan style Furniture" and the plan of "New Wholesale Base of Chengdu Furniture Factory" to create a high-quality and affordable market.
Cut down into the fine decoration trillion market, increase capital to hold Sichuan Jiannan decoration, and sign fine decoration cooperation agreements with a number of housing enterprises.
In July 2020, Fusen Meijiannan invested to set up Chengdu Fushenmei Huachuang Decoration Design Co., Ltd., which mainly undertakes the decoration and decoration design business of real estate and residential projects, and the decoration business recorded nearly 50% positive growth in 2020.
The judgment of the company. As the leader of home retail in southwest China, the company has rich assets and significant revaluation value. on the basis of maintaining the steady development of the main business of home stores and consolidating the basic market, the company continues to explore new business type and new models of home retail, relying on its own complete supply chain system. through the co-construction and sharing of platform resources, merchants can jointly build ecology, transform to a new manufacturing retail track, and give birth to new opportunities for new growth.
Update the profit forecast. It is estimated that the net profit from 2021 to 2023 is 805 million yuan, 946 million yuan and 1.082 billion yuan respectively, an increase of 4.1%, 17.6% and 14.3% over the same period last year. The current market capitalization of 11.8 billion yuan corresponds to 15 times, 12 times and 11 times of PE from 2021 to 2023 respectively. With reference to the valuation of comparable companies, it is given 16-20 times PE in 2021, corresponding to a reasonable market value range of 12.9 billion-16.1 billion yuan, and a reasonable value range of 17.13-21.41 yuan; this range corresponds to a company's PS of 8.1-10.1 times in 2021, giving an investment rating of "better than the big market".
Risk hint. The real estate boom is declining; online channel impact; brand side and real estate side diversion; competition intensifies.
