Overview of events
The company issued a semi-annual performance forecast, the first half of the year is expected to achieve a net profit of 0, 000 yuan-25 million yuan, turning losses into profits. Of this total, the net profit of returning home in the second quarter is expected to be 73.47 million yuan to 98.47 million yuan, an increase of 171% over the same period last year.
Analysis and judgment:
Further improve the construction of channels to ensure income growth, and continue to improve the profit level of fine management. In terms of growth, channel construction and coverage have been further improved, especially the expansion of overseas channels has achieved remarkable results. In the first half of the year, the main business income achieved steady growth.
In terms of efficiency, the company continues to implement fine management, operating expenses have decreased compared with the same period last year, while continuing to grasp cash flow management, interest-bearing liabilities have been reduced and interest expenses have been reduced. Make full use of the background of shareholders of state-owned enterprises, for the company bank credit and business operation level has a strong endorsement role, in addition to ensuring the company's low financing costs, large project support, but also plays an important role in supporting the company's long-term benign and rapid development.
In addition, benefiting from exchange rate fluctuations, the company generated certain exchange gains in the first half of the year.
The demand for global private network digital trunking terminals has gradually recovered, and the company has fully benefited as an industry leader. According to a report by Omdia, a research institution, global private communications digital trunking terminal shipments have resumed growth of about 7% since 2021 after a decline caused by the epidemic in 2020. Since the beginning of this year, with the resumption of overseas travel, the gradual normal development of business activities and the further improvement of channel construction and coverage, the company's main business has maintained a steady growth trend.
According to the Shanghai Securities News, at the Global critical Communications Exhibition (CCW), with innovative products and industry solutions, the company won 14 nominations in the authoritative "2022 Global critical Communications Awards (ICCA)" in the field of private communications, and finally won five awards, including 1/3 awards, including narrowband, broadband, 5G, public college integration and other products. And covers public safety, transportation, power and energy, mining and other industry segments, becoming the most nominated and award-winning enterprises in the industry.
Sell the stake in Cypress, get an one-time pre-tax income of about 290 million, optimize the debt ratio, continue to ease financial and financial pressure, and focus on the new business direction of growth.
The 25th meeting of the fourth session of the Board of Directors was held on July 13, 2022, and the "Bill on the transfer of Equity of subsidiaries" was adopted. It is agreed that the company will transfer 100% of its wholly-owned subsidiary Sepulet to SBL at a price of 159.5 million euros (about RMB 1.076 billion). According to the preliminary calculation, this transaction (including the restructuring for this transaction) is expected to bring about 290 million yuan of pre-tax income (the specific amount is subject to the audit results). It is expected to have a positive impact on the company's net profit in 2022.
The proceeds from the transfer of Cypress shares will be used to repay the company's debts that have or are about to mature, comprehensively improve the company's liquidity, significantly reduce interest-bearing liabilities, and expect the asset-liability ratio to fall below 50%. At the same time, high interest payments will be reduced, which will help the company to improve its anti-risk ability and sustainable profitability.
At present, the company is in a critical period of business transformation, and growth businesses such as public-college integration, 4ax 5G broadband, command and dispatching have gradually become an important pillar of the company's growth. This transaction will help the company to focus its resources on growth business investment and promotion.
Investment suggestion
Considering the continuous release of newly signed orders and the gradual growth of domestic order business, we continue to be optimistic about the company's leading position in the special network, and the improvement of domestic rail transit, 5G, public security network and other demand is also expected to lead to the improvement of the company's fundamentals. Considering the stabilization of the company's business and the expected one-time pre-tax gain of about 290 million yuan from the sale of its shares this year, we adjust the company's revenue and profit forecasts. We expect revenue from 59.8/69.8/N/A to 66.5 59.8/69.8/N/A 77.3 trillion yuan in 2022-2024, and earnings per share will be 0.22 billion yuan respectively. Adjust 27 whole / N to / A0.22 pound 0.26 yuan, corresponding to the closing price of 4.92 yuan per share on July 15, 2022, PE is 18.9 times of 22.3 pound, maintaining the "overweight" rating.
Risk hint
The overseas epidemic situation continues to repeat, customer orders are not sustainable, the Sino-US science and technology war leads to the instability of the company's supply chain, and the patent dispute with Motorola requires large compensation.