Incident: Recently, Chuan University Zhisheng released the 2016 annual report. The company achieved operating income of 316 million yuan in 2016, an increase of 20.94% over the previous year; net profit attributable to shareholders of listed companies was 388.91 million yuan, an increase of 16.40% over the previous year.
Comment:
Revenue grew rapidly, and the air traffic control business became a bright spot. The company's revenue grew rapidly, mainly due to the 31.23% increase in revenue from the “Aviation and Air Traffic Control Products and Services” sector, which increased its share of total revenue from 43.45% to 47.15%. On the one hand, the rapid development of aviation and air traffic control business has benefited from the total number of new contracts signed in air traffic control related fields in 2016 exceeding 150 million yuan, an increase of more than 50% over the previous year. On the other hand, the two A320D flight simulators purchased by the company were put into use in 2016. As of the reporting date, the company had already put four flight simulators into training services. According to Boeing's forecast, China's civil aviation transport fleet will increase from the current 3,000 aircraft to 6,330 aircraft by 2035, bringing the total to more than 9,300, making it the world's largest aviation country. According to a report from Xinhuanet, China's overall investment demand for air traffic control systems is expected to reach 57 billion yuan during the “13th Five-Year Plan” period. This figure far exceeds the “12th Five-Year Plan” investment. Against the backdrop of rapid growth in the volume and complexity of air traffic control systems in China, the domestic air traffic control industry is expected to continue to develop rapidly, and the company will also benefit from the development of the industry.
A breakthrough has been made in face recognition products. The company has made a breakthrough in the development of small 3D face camera prototype products. The technical indicators are superior to similar products abroad. The accuracy rate of 3D/3D recognition has improved markedly, and it has strong anti-counterfeiting capabilities. The expected volume and price of this product are less than 20% of the company's original high-precision products, making it suitable for large-scale field applications.
In addition, the company's face recognition authentication product was tested at Chengdu East Railway Station for one year. Face recognition was used for authentication more than 5 million times, and the correct recognition rate reached 95.6%, leading the application of various railway systems across the country. The product was praised at the Railway Corporation meeting and was highly recognized by users of the Chengdu Railway Administration. At present, the product has been expanded to be tested at railway stations in Chongqing, Guiyang and other places. The company's face recognition products and technology were also used in the safety and security of the 16th Western Expo.
The company's face recognition technology is leading the way, and the application of face recognition products is gradually being implemented, which is expected to improve the company's overall performance.
VR product development has been completed, and the influence of the industry has increased. The company has completed research and development of multi-person interactive detection technology, interactive experience programs, and VR popular science classroom products, forming three types of virtual reality experience products featuring panoramic interaction. VR products will be introduced to the market after passing certification in 2017, becoming a new growth point for performance. As the vice chairman unit, the company participated in the “Virtual Reality Industry Alliance” organized by the Ministry of Industry and Information Technology and the “China Virtual Reality and Visualization Industry Technology Innovation Strategic Alliance” respectively.
The company's influence in the virtual reality industry has been further enhanced.
Profit forecast and rating: We expect the company's revenue from 2017 to 2019 to be 411 million yuan, 526 million yuan and 662 million yuan respectively, and net profit attributable to the parent company is 50.21 million yuan, 68.37 million yuan and 91.52 million yuan respectively. Based on the latest share capital, earnings per share are 0.22 yuan, 0.30 yuan and 0.41 yuan respectively. Based on the latest share capital, the PE corresponding to the latest stock price is 136 times, 100 times and 75 times, respectively. Maintain a “hold” rating.
Risk factors: Market demand falls due to macroeconomic influence; market performance of new products falls short of expectations; risk of brain drain.
