What happened: on April 27, 2016, the company released its 2015 annual report and the first quarter report of 2016. In 2015, the company achieved operating income of 252 million yuan, an increase of 24.15% over the same period last year, and the net profit belonging to shareholders of listed companies was 42.57 million yuan, an increase of 1.53% over the same period last year. In the first quarter of 2016, the operating income of the company was 58.64 million yuan, an increase of 49.23% over the same period last year. The net profit attributable to shareholders of listed companies was 16.78 million yuan, an increase of 25.01% over the same period last year. Net profit attributed to listed companies after deducting non-recurrent profits and losses
Comments:
The strengthening of sales achieved remarkable results, and the first quarter of 2016 got off to a good start. The company achieved rapid growth in operating income in 2015 and the first quarter of 2016, indicating that the company has achieved remarkable results in strengthening the building of the sales team and in-depth expansion of the industry line. the company is developing from a single security to the combination of security and mobile Internet. It is worth noting that operating income in the first quarter of 2016 achieved rapid growth after the completion of the execution of previous large orders, and the net profit belonging to shareholders of listed companies achieved rapid growth in the case of a substantial reduction in software tax rebates and an increase in expenses. it shows that the company's main business is making good progress and its profitability has improved significantly.
Sales of front-end products are growing rapidly. In terms of products, the sales revenue of the front-end products in 2015 was 53.11 million yuan, an increase of 51.68% over the same period last year; the sales revenue of the back-end products was 107 million yuan, but decreased by 13.84% compared with the same period last year. The sales of the front and rear products of the company are basically consistent with the market demand of security products. In addition, the order signed between the company and Beijing Zhongjiaoneng in 2014 contributed a large amount of sales revenue in 2015, and the contract had been completed by the end of 2015. We should pay attention to what new products or new business revenue the company uses to make up for the revenue gap in 2016.
The decline in gross profit margin and the increase in sales costs are expected to improve gradually. The company's comprehensive gross profit margin in 2015 was 56.04%, which showed a continuous downward trend compared with the previous two years. At the same time, due to the company's increased investment in sales in 2015, sales expenses increased by 62.48% compared with the same period last year. As a result of the continuous decline in gross profit margin and the increase in sales expenses, the company's profit cannot keep pace with operating income. In the future, with the establishment of the sales team and the expansion of product sales scale, the growth rate of sales expenses will slow down, and the gross profit margin will stabilize or pick up slightly.
Earnings forecast and rating: we estimate that the company's EPS for 2016-2018 will be 0.24,0.32,0.39 yuan respectively, and the latest share price corresponding to the 2016-2018 PE will be 64,48,39 times respectively, maintaining the "overweight" rating.
Risk factors: declining gross profit margin and slow progress of highway WiFi business.
