2021 semi-annual report: The company achieved revenue of 37.6 billion yuan in 202H1, YoY +27%, net profit of 86.96 million yuan, YoY +19%, net profit of 76.98 million yuan after deduction, and YoY +168%. 2021Q2 achieved revenue of 17.6 billion yuan, YoY +15%, net profit of 76.75 million yuan, YoY +2207%, net profit of 73.67 million yuan after deduction, and YoY -1433%.
Offline channels have recovered, and the communication product sales and maintenance business has rebounded markedly: offline channels have recovered significantly, the company's related stores have resumed normal operations, and revenue from the communication product terminal business has increased steadily. Among them, 2021H1's communications products achieved revenue of 35.4 billion yuan, YoY +31%, mainly driven by the increase in mobile phone sales; communication product maintenance revenue was 100 million yuan, and YoY +109%.
An e-cigarette strategic development project was introduced, and the “1+N” core strategy was implemented: the company actively laid out the e-cigarette offline retail scenario, helped e-cigarette brands carry out omni-channel construction, and 2021H1's e-cigarette related business achieved revenue of 26.37 million yuan. According to the company's 2021 semi-annual report, the company has signed a strategic cooperation agreement with e-cigarette brand Platte and Ono, becoming the sole national company for Platte and Ono. In addition, it has reached strategic cooperation with the dual brands VOOPOO, ZOVOO, and other brands under the Jiji Group. With strong terminal investment, operation, and supply chain integration capabilities, the company helped brand customers sign 1,800 contracts with intended customers in the first half of the year. A total of 2,124 merchants passed manufacturer reviews, and opened more than 1,414 businesses. The company continues to sign new customers and gradually expands to overseas markets, and the e-cigarette business is expected to become the company's second life curve.
The company's profitability is relatively stable, and the addition of high-margin businesses is expected to improve the company's profitability:
The company's net sales interest rate for the second quarter alone reached 0.44%, reversing the weak profit situation in the same period last year.
The company added a high-margin e-cigarette channel business, and the gross margin of the 2021H1 e-cigarette business reached 24%, far higher than the company's traditional business. The company's profit is expected to improve further as related businesses expand.
Investment suggestions: The company's traditional smart terminal sales continue to advance, the new business layout activates the company's competitiveness, and digital empowerment continues to advance. The company's EPS is expected to be 0.18/0.21/0.23 yuan from 2021 to 2023, respectively, maintaining the increase in holdings - B rating.
Risk warning: E-commerce retail recovery falls short of expectations, lottery business falls short of expectations, and e-cigarette policies are uncertain