Events:
On February 22, 2017, the company released KuaiBao's annual results. In 2016, the company achieved an operating income of 1.473 billion yuan and a net profit of 80.1273 million yuan belonging to the owner of the parent company, an increase of 2.36% and 24.58% respectively over the same period last year.
Main points:
1. Thanks to the growth of the main business and the decline in financial expenses, the performance growth exceeded expectations.
In 2016, the company achieved operating income of 1.473 billion yuan, operating profit of 66.9043 million yuan and net profit of 80.1273 million yuan, up 2.36%, 17.21% and 24.58% respectively over the same period last year. We believe that under the circumstances that the overall growth rate of the IC card industry has slowed down and the peak of 4G card replacement in China has passed, the company's performance growth has obviously exceeded expectations, which is 5% higher than our previous forecast of homing net profit of 76.35 million yuan, basically reaching the upper limit of the forecast for the third quarterly report. The main reason for the growth of the company's performance is the steady improvement of the main business, especially the accelerated expansion of overseas markets, the increase in the number of cards issued, the strengthening of expense management, and the decline of financial expenses compared with the same period last year.
two。 With the accelerated development of the Internet of things, the company is expected to be the first to benefit from SIM cards and modules.
We believe that the Internet of things will enter a period of rapid development in 2017, in which with the opening of the first year of NB-IoT business, the Cellular Internet of things is expected to achieve rapid development driven by the three major operators and Huawei and ZTE. It is estimated that there will be 150 million new cellular Internet of things connections in China in 2017, with a net increase of twice that of 2016. Recently, China Mobile Limited has made frequent moves in the field of the Internet of things, including starting the procurement of 27.54 million Internet of things USIM cards in 2017, and Jiangxi Mobile and Jiangsu Mobile have also released NB-IoT commercial networks.
In 2016, the company issued a "non-public offering A-share Plan", which intends to invest 42.1 million yuan in the "Research and Development Project of secure access solution based on NB-IoT Technology". Taking eSIM as a starting point, the company developed a secure access and management solution based on NB-IoT technology, an eSIM contract management platform, and a NB-IoT communication chip module integrated with eSIM. Therefore, the company is expected to quickly enter the Internet of things market through fixed growth and project fundraising, gain a larger market share based on SIM card and module business, and inject a boost into performance growth.
Conclusion:
We estimate that the company's EPS from 2017 to 2018 will be 0.29 yuan and 0.37 yuan respectively, and the corresponding PE will be 56 times and 44 times respectively, maintaining the "recommended" rating.
Risk tips: the development of the Internet of things is not as expected; industry competition intensifies; fixed growth fails.
