Incident: The company released its 2021 mid-year report.
Revenue grew rapidly. According to the company announcement, the company achieved revenue of 622 million yuan in the first half of 2021, an increase of 29.77% over the previous year; in the first half of the year, the net profit of the mother was 83 million yuan, an increase of 8.63% over the previous year. Looking at the revenue structure, the company's smart mobile data terminal revenue reached 281 million yuan, smart mobile payment terminal revenue was 42 million yuan, and special printer revenue was 211 million yuan. The rapid increase in revenue indicates that the company's business is expanding steadily.
Continue to step up the development of new products and lay out a number of cutting-edge fields. According to the company announcement, the company released new products such as the DT50 series 5G smart terminal, the DT50U ultra-high frequency RFID smart handheld terminal, the RT40 next-generation industrial security smart terminal, the SR5600 wearable two-dimensional scanning ring, the special printer K329, and the P8100 series industrial tablet, focusing on strengthening research and development of smart medicine, digital yuan, artificial intelligence and 5G-related technology and product applications.
Products such as smart mobile payment terminals and all-in-one cashier cloud printers developed by the company won bids for Shenzhen Connect, Bank of Guizhou, Yintai Department Store, China Post, Tonglian Pay, and Tobacco Intelligent Integrated Payment projects. We believe that in the context of the accelerated implementation of emerging technologies and application scenarios such as the digital yuan, various directions of the company's early layout are expected to usher in a harvest season.
The AIoT era has arrived, and the waves of the times have brought long-term growth. According to GSMA forecasts, the number of global IoT connections will increase from 12 billion in 2019 to 24.6 billion in 2025, with a compound annual growth rate of 12.7%. China, the US, and Western Europe account for about 75% of global IoT spending, with the Chinese market growing faster than the US and Western Europe. The number of IoT connections in China reached 3.6 billion in 2019, of which the enterprise market and consumer market each accounted for 1.8 billion. The number of IoT connections in China is expected to grow to 8 billion by 2025, with a compound annual growth rate of 14.2%. The company's core businesses, smart mobile data terminals and smart mobile payment terminals, achieved growth of 28.61% and 42.25% respectively in the first half of 2021, and are expected to continue to benefit in the context of the high popularity of the IoT circuit.
Investment advice: As a leading digital solution provider for the IoT industry in China, the company is expected to continue to benefit in the context of the high prosperity of the IoT industry and the gradual advent of emerging application scenarios such as the digital yuan. The company's EPS is expected to be 0.52 yuan and 0.65 yuan respectively in 21-22, covered for the first time, and given a buy-A rating.
Risk warning: The expansion of the company's product market fell short of expectations, and increased market competition caused the gross profit margin of the product to decline