Event
The company released its annual report for 2016: the total revenue for the whole year was 1.15 billion yuan, an increase of 30.71% over the same period last year; the net profit of returning to the mother was 16.1922 million yuan, down 30.82% from the same period last year, down 30.85% from the same period last year; and the net profit after deducting non-return was 21.7883 million yuan, an increase of 6.68% over the same period last year. Among them, the company achieved a total operating income of 512 million yuan in the fourth quarter, a net profit of 6.9898 million yuan, and a net profit of 14.6037 million yuan after deducting non-return.
According to the main business, the company's home appliance business income is 807 million yuan, mobile phone business income is 343 million yuan, excluding mobile phone business, home appliance income decreased by 8.28% compared with the same period last year. The main reason is due to the slowing growth of the industry, the economic downturn and the intensification of market competition.
The gross profit margin is 13.29%, and the mobile phone business improves the company's profitability. The company's gross profit margin was 13.29% in 2016, an increase of 0.21PCT over the same period last year. The expense rate for the whole of 2016 was 11.50%, a decrease in 1PCT compared with the same period last year. Of these, the sales expense rate was 4.17%, which was 1.97 0.76PCT lower than that of the same period last year; the management expense rate was 6.48%, an increase of 2.21 PCT over the same period last year; and the financial expense rate was 0.85%, an increase of PCT over the same period last year.
In terms of business format, the gross profit margin of home appliance retailing was 9.74%, a decrease of 0.16PCT compared with the same period last year.
The gross profit margin of the newly launched mobile communication service is 11.67%. Overall, the continued decline in the home appliance industry has had a negative impact on the company's inspection business, but the company acquired a 100% stake in Dejing Electronics in 2016, and the layout of mobile communications business plays a positive role in the company's profitability.
Acquire 100% stake in Dejing Electronics, quickly enter the smartphone market in September 2016, the company acquired 100% stake in Dejing Electronics with 800 million cash. Dejing Electronics, as a leader in the smart mobile communications industry, has helped the company quickly enter the smartphone field and become a professional smartphone platform under Gome. Dejing Electronics has promised that the net profit for 2016-2018 will be 60 million yuan, 80 million yuan and 100 million yuan respectively. From the audit report of the profit forecast and actual operating difference statement of Zhejiang Dejing Electronic Technology Co., Ltd., Dejing Electronics achieved a net profit of 69.7352 million yuan in 2016, exceeding the performance promise and greatly thickening the company's performance.
Dejing Electronics, as a benchmark in the safe mobile phone industry, has strong R & D strength and has a number of core technologies and patents.
Rich experience in mobile phone voice encryption, data encryption, intelligent security dual operating system, biometric technology and so on. The "Zitan secure Mobile phone" jointly developed by Dejing Electronics and Spreadtrum Technology, China Science and Technology Hongba and Yuanxin Technology is expected to become a milestone in the industry. Counter point estimates that the size of the secure mobile phone market is more than 16 billion yuan, and in the next few years, it will grow at a high speed of 20%, 30%, and has broad prospects.
Relying on Gome to help the company grow rapidly
The company's predecessor is Zhengzhou Department Store Stationery Co., Ltd. In April 1996, with the approval of the China Securities Regulatory Commission, it was listed for trading on the Shanghai Stock Exchange. In February 2008, Shandong Longji Island Construction Co., Ltd. won 27 million shares by auction, becoming the largest shareholder of the company. Huang Guangyu is the actual control of the company.
Huang Guangyu and the Gome holding Group behind him are the actual controllers of the company. In 2015, Gome has total assets of 127.8 billion yuan, operating income of 110.7 billion yuan and annual net profit of 2.07 billion yuan. It has a total of five listed companies. In 2015, with the strategic goal of "building a full retail ecosystem", the Group achieved the linkage of six sectors, covering retail, e-commerce, logistics, real estate, investment, culture and media, medicine and health, finance and high-end clubs. After the completion of the acquisition, the company will become one of the six major sectors of Gome with the assistance of the group: professional smartphone platform, the prospect is worth looking forward to.
Profit forecast and valuation
According to the company's annual report in 2017, we estimate that the return net profit of the company from 2017 to 2019 will be 172 million yuan, 321 million yuan and 417 million yuan respectively, and the corresponding EPS will be 0.68,1.27,1.65 yuan. In the future, we are optimistic about the development of the company's smartphone business and give the company a "buy".
Rating.
Risk hint
The macro-economy continues to decline, business transformation and integration are not as expected, and the development of the secure mobile phone market is not as expected.