Event: when the company released its mid-2021 report, its operating income in the first half of the year reached 340 million yuan, an increase of 1% over the same period last year; the net profit belonging to shareholders of listed companies was-44.33 million yuan, changing from profit to loss compared with the same period last year; excluding the influence of 57.2 million yuan in equity incentive fees, the net profit was 12.87 million yuan, down 81% from the same period last year; basically consistent with the previous forecast and in line with expectations.
Front end: broadband network products return to positive growth, and mobile network products expand rapidly. In the first half of the year, revenue of broadband network products reached 160 million yuan, an increase of 24% over the same period last year, with a gross profit margin of 86.8%, a decrease of 1.01pct over the same period last year. Revenue growth is mainly due to the recovery of industry demand after the epidemic, while the acceptance of some projects has been postponed from Q4 last year to the first half of this year. We believe that the relevant investment and construction departments in 21 years are mainly focused on planning, and 22 years are expected to enter the construction boom cycle. The revenue of mobile network products was 92.07 million yuan, up 103% from the same period last year, and the gross profit margin was 68.5%, down 2.33ptc. The company launched 5G mobile network products in time, and is developing 5G fixed mobile network products, which is expected to be released in the second half of 2021. We believe that the mobile network, as a 5G post-cycle product, is expected to enter a rapid growth period in 22 years, replicating the growth path of 16-18 years.
Back-end: it is greatly affected by overseas epidemic situation. In the first half of the year, revenue from online content security totaled 20.47 million yuan, down 57 percent from the same period last year. Big data's operating revenue was 10.98 million yuan, down 85% from the same period last year. Mainly affected by the epidemic, overseas business development is difficult, resulting in some orders signing and implementation have been delayed.
The equity incentive cost suppresses the apparent profit and will be alleviated year by year in the future. In the past 20 years, the company awarded restricted stock when the stock price was high, so a higher equity incentive fee was confirmed. according to the previous disclosure data and annual report data, the company's equity incentive fee for the year 20-24 was about 0.6 shock 1.3 0.9 shock 0.4 billion yuan, thus further suppressing the performance release, and now the stock price has fallen more, close to the restricted stock grant price.
Continue to invest in R & D, consolidate the advantages in traditional fields and actively expand new directions. The company continues to invest a lot of manpower and material resources in pre-research and development of new products, the proportion of R & D investment in business income reached 43.41%, the number of R & D personnel reached 808, accounting for 57.14% of the total number of the company. On the one hand, continue to increase R & D investment in traditional business areas to maintain the leading edge of products and technology; on the other hand, actively transform to ToB business (enterprise digital transformation), with large pre-R & D and market investment.
The company's own logic continues to verify: front and rear extension, multi-sector expansion. After years of continuous hard work, the company's management team continues to verify its own logic. Sales have changed from distribution to direct sales, with the proportion of direct sales rising from 74% to 84% in 1820. Products extend from front-end to back-end, and the proportion of web content security and big data operating products increased from 10.37% to 21.28% in 1820. The field of business extends from online messaging and public security to security and industrial enterprise applications.
Maintain the "Buy" rating: maintain the net profit forecast for 21-year-old 23 years 3, 4.5 billion, corresponding to PE 22X/15X/13X.
Valuations already have a margin of safety, maintaining a "buy" rating.
Risk hints: the fluctuation risk of government procurement cycle, the influence of project acceptance cycle fluctuation, and the equity incentive cost suppresses performance release.
