Company announcement: 2021H1 realized revenue of 37.6 billion yuan / + 26.64% (year-on-year, the same below), net profit of 87 million yuan / + 19.30%, and non-return net profit of 77 million yuan / + 168.42%. Among them, Q2 single-quarter revenue of 17.6 billion yuan / + 15.15%, return to the mother net profit of 77 million yuan / + 22.066%, deducting the non-return net profit of 0.74 billion yuan /-14.33%.
The mobile phone distribution business is growing steadily, and the overall fee control effect is good. 21H1's revenue growth rate reached 26.64%, due to the steady growth of mobile phone distribution business, especially the substantial growth of JD.com Inc platform. As a result, although the company's gross profit margin has declined due to the epidemic and business restructuring, the net profit deducted from non-return has still increased by 168.42%. In addition, the company continues to promote cost reduction and efficiency, and the overall fee control effect is good. The 21H1 sales rate 1.45%/-0.10pct, the management rate 0.46%/-0.15pct, the financial rate 0.39%/-0.17pct, and the R & D rate 0.10% are the same as the same as the same period last year, making the overall rate of the period lower 0.42pct.
Mobile phone distribution business is growing steadily. 21H1's mobile phone distribution business achieved revenue of 35.4 billion yuan / + 30.69%, accounting for 94.33% of the total revenue, which is presumed to come from the continuous volume of JD.com Inc's online distribution business. In addition, the company actively expanded Huawei's overseas sales channels in the first half of the year, and has cooperated with 340 customers in nearly 30 countries in Latin America and Central and East Africa.
With the development of both at home and abroad, the lottery business has increased significantly. Thanks to the achievements of the company's business at home and abroad, 21H1's lottery business achieved revenue of 93 million yuan / + 91.67%. 21H1 has steadily expanded its domestic business and won the bid for welfare sports lottery projects in Hebei, Shanxi and other provinces, with a corporate income tax discount of 10%. Overseas businesses have also achieved breakthroughs, signed contracts with Jamaican operators, and launched the online lottery sales system in Jamaica and Nigeria in February and June, respectively.
The e-cigarette business is expected to become a new profit point for the company. 21H1 has become Platinum, Ono and other countries; held a total of 25 provincial and 47 municipal Merchants' Chambers of Commerce in Shanghai, Shenzhen and Jiangxi, with a total of 7689 customers, 2030 prospective customers, 2107 approved by manufacturers and 1440 business openings; and reached strategic cooperation with VOOPOO, ZOVOO and only other brands of Ji Wani Group. The company continues to lay out the new e-cigarette track, with revenue of 26 million yuan and gross profit margin of 23.96% in the first half of the year. E-cigarette business is expected to become a new growth point for the company.
Profit forecast and investment rating: the sound mobile phone distribution business and the reduction of cost control fees have contributed to the steady growth of 21H1's home net profit.
Looking to the future, the strategic layout of the company is gradually clear, the expansion of JD.com Inc platform will promote the sustained and rapid growth of mobile phone distribution business, the "going out" strategy opens the development space of lottery business, in addition, the company lays out a new electronic cigarette track, e-cigarette business has become the second life curve, it is suggested that active attention should be paid to it. To maintain the profit forecast, it is estimated that the EPS for 21-23 will be 0.14 pound 0.24, 0.34 yuan, and the share price on July 30 will be times as much as 61-35-25 corresponding to PE, maintaining the "prudent overweight" rating.
Risk tips: overseas demand is lower than expected, exchange rate risk, business expansion is not as expected, etc.