Main points of investment:
The company provides technical solutions and manufacturing services to customers around the world, and its products cover a wide range of network communications, consumer electronics and intelligent hardware. The company deeply ploughs the field of electronic manufacturing and has accumulated a deep background. Since 2015, new product development and market expansion have also been the focus of the company's development. At present, the company has a wide range of customers, including traditional electronic manufacturing enterprises, such as Huawei, Samsung, Lenovo, etc., as well as domestic mainstream Internet enterprises such as XIAOMI, Tencent, and traditional home appliance enterprises such as Gree and Midea. As the adjustment of the business model led to the adjustment of the mode of revenue recognition, from the original EMS-dominated model in which all spare parts were recorded as income, to the model in which ODM/OEM recorded design income and processing income as income, resulting in a slight decline in operating income in the first three quarters of 16 years, with an operating income of 1.995 billion and a net profit of 9.5777 million. As the company's business model focused on ODM, coupled with the progress of automated production transformation, the company's gross profit margin improved significantly in the first three quarters of 2016.
Based on the traditional intelligent hardware manufacturing, the company actively develops the product solution of the Internet of things as an extension of its future value. The company has a solid foundation in providing intelligent hardware solutions and supporting services, and a wide variety of product layouts in the past have laid an advantage for the company to provide cross-industry technology and manufacturing services.
Some of the Internet of things and smart hardware products were already included in the company's communications equipment and consumer electronics sectors in 2015. The company regards LoT Internet of things as an important development direction, complementing with traditional manufacturers, providing customers with Internet of things and intelligent transformation solutions, and has gradually formed local advantages in communication modules, and the Internet of things and intelligent hardware will provide new profit growth for the company in the future.
The company's fixed increase plan has been examined and approved by the CSRC and intends to raise 756 million yuan. The funds raised will be invested in two major projects: smart manufacturing and innovation support platform. Intelligent manufacturing helps to improve production efficiency, improve product quality and reduce production costs. The company continues to accumulate experience in pre-investment and research and development, and has made progress in the field of intelligent manufacturing. At present, the automation special equipment and information system independently developed by the company have been widely used in production plants. The innovation support platform project will further enhance the company's technical strength in intelligent product research and development. This fixed increase will also further increase the shareholding ratio of the controlling shareholder, which is expected to be 19.55% after the fixed increase, which will contribute to the promotion of the company's future extension development.
The company attaches importance to research and development and innovation cultivation, early layout of new growth points in the future. In recent years, the company's R & D investment is increasing, and the team of R & D personnel is also expanding. The company has laid out the innovation and entrepreneurship, giving full play to its traditional manufacturing advantages, speeding up the hardware delivery of innovation projects, and docking with international innovation achievements, building a bridge between foreign advanced innovation technology and domestic manufacturing capacity.
Profit forecast and investment advice. The forecast EPS for 16,17,18 years is 0.02,0.07,0.10 respectively, considering that the company has just turned from loss to profit in 16 years, and there are broad prospects for the development of intelligent hardware and Internet of things in the future, the company has certain transformation expectations, and there is still uncertainty at present, so the target price and rating are not given for the time being.
Risk hint. The level of the company's net interest rate remains low, the development progress is slow, and the market expansion is not as expected.