Event: an Jubao released its semi-annual report on August 26, 2016. In the first half of 2016, the company achieved operating income of 339 million yuan, an increase of 4.86% over the same period last year, and a net profit of 3.1194 million yuan for shareholders belonging to the parent company, a decrease of 79.81% over the same period last year. Based on the latest share capital, the diluted earnings per share is 0.01 yuan.
Comments:
Operating income has increased slightly, and profitability needs to be improved. In the first half of 2016, the company achieved a small increase in revenue, mainly due to more year-on-year growth in monitoring and system integration, display sales and slower growth in other business revenue. In the same period, the company signed 5224 contracts, with a total contract amount of 448 million yuan, an increase of 9.04% over the same period last year. The company's home net profit dropped sharply, mainly due to the company's vigorous promotion of mobile Internet projects and urban cloud parking networking projects, resulting in a continuous increase in sales and management expenses. In the future, with the in-depth promotion of these two projects and the improvement of revenue capacity, the company's profitability will be greatly improved.
The promotion effect of the new model is remarkable, and cloud parking is developing rapidly. In the first half of the year, the company vigorously promoted the smart cloud parking business. On the one hand, the cloud parking management team and technical service personnel have been redeployed and a better incentive and restraint mechanism has been established. On the other hand, relying on a large number of marketing outlets and strong community customer resources, a new promotion model of giving away advertising gates has been launched to the parking lot management. As a result, the company's cloud parking business has developed rapidly, with a total of 1741 car parks contracted in the first half of 2016, including 1452 advertising gate parking lots, a significant increase compared with 504 at the end of 2015; involving a total of 3495 sets of parking equipment, of which 2675 sets of advertising gate equipment; and in some parking lots to achieve unmanned duty, saving greater costs for parking management. With the promotion of this model, it will also drive the sales or rental of the company's self-service toll machines, parking guidance systems and other equipment, thus bringing benefits for the company. Based on "Smart Cloud parking + online traffic gate advertisement"
The company has also negotiated with potential partners on advertising applications and data applications, laying the foundation for the company's future extension development.
Adjust the strategy of Internet products to create converged APP. Relying on the advantages of marketing network and customer resources, the company continued to promote the mobile Internet project, adjusted the Internet product strategy in the first half of the year, and developed a discount chain APP. This product is a preferential light application aggregation platform, which brings together the core functions and the latest offers of various preferential applications. An APP can meet users' needs for clothing, food, housing, transportation, entertainment, tourism, learning, financial management and other aspects of consumption. Users can use the main functions and enjoy their discounts without additional downloading other APP. The company will aggregate the peripheral discount APP into the discount chain APP platform, through the exchange of traffic and other measures to reduce the cost of obtaining fans, so as to promote the development of peripheral offers.
Earnings forecast and rating: we expect the company's operating income for 2016-2018 to be 902 million yuan, 1.037 billion yuan and 1.193 billion yuan respectively, and the net profit attributable to the parent company to be 66 million yuan, 75 million yuan and 81 million yuan respectively. Based on the latest equity, the earnings per share are 0.12,0.14,0.15 yuan respectively, and the latest share price is 109,96 and 89 times of PE respectively. Maintain the "overweight" rating.
Risk factors: the risk that the company's transformation is less than expected; the risk of industry policy adjustment; the risk of a sharp decline in profits.