Original insights:
The company is a high-tech enterprise continuously focusing on R & D, manufacturing and sales of communication network access products, focusing on "enterprise integrated access" as the market focus and communications operators as the foothold, focusing on enterprise integrated access equipment. The products are used in many fields such as communication operators, smart grid, intelligent transportation and so on. With strong independent innovation and R & D capability, stable and reliable product quality, it has established a good reputation in the access equipment market at home and abroad. The company's gross profit margin has been stable at more than 58% in recent years, and net profit is growing faster than revenue.
Main points of investment
1. Leading access equipment enterprises whose gross profit margin is stable above 58% and whose net profit growth rate is higher than revenue growth rate.
The company specializes in the research and development, production, sales and service of access equipment, and its main products are integrated access terminal equipment and centralized office equipment. The company's operating income increased from 1.233 billion yuan in 2012 to 1.999 billion yuan in 2016, with an average growth rate of 12.95%. The company's net profit increased from 119 million yuan in 2012 to 253 million yuan in 2016, with an average growth rate of 26.35%, mainly due to increased investment in R & D and sales since 2014.
The gross profit margin of the company's main business is relatively stable, which has been maintained at more than 58% in recent years, mainly because the company has strong R & D strength, perfect production technology, and the company's customized products enable the company to have a strong pricing ability for its products. at the same time, the company has a strong ability in cost control.
two。 Focused on the access equipment industry, strong independent innovation research and development strength, stable product quality and strong reliability, established a domestic and foreign, long-term cooperation, sustained and stable high-end customer network
The company mainly has 12 core technologies, involving ASIC chip design, packet core architecture, highly integrated converged communication system architecture, Internet of things, industrial cloud and other related fields, and all of them are independent innovations, of which 11 can be used for mass production, and a number of ASIC independent chips have been used in access devices. The company has a deep understanding of the differentiated needs of operators' branches, and is able to tailor solutions for them. product quality and service quality have been widely recognized by major customers, and a strong cooperative relationship has been established with major customers. From 2014 to 2016, the top five customers of the company include China Mobile Limited, China Unicom and China Telecom Corporation. These customers have high reputation and strong strength, and they are the company's long-term partners. The annual sales of the three major operator customers all account for more than 50% of the revenue, and are growing year by year. The company's middle-level managers and core technical backbone team are stable, strong cohesion and high execution. Through indirect shareholding, it will help to further stimulate the initiative and creativity of employees, and further strengthen the management advantages of the company.
3. Investment suggestion: the revenue from 2017 to 2019 is expected to be 2.415 billion yuan, 2.948 billion yuan and 3.632 billion yuan, and the net profit is 275 million yuan, 304 million yuan and 344 million yuan, corresponding to 38X, 34X and 30x of PE.
4. Risk tips: the company's inventory accounts for a higher proportion of the company's total assets, there is a risk of inventory price decline; the company's accounts receivable account for a higher proportion of the company's total assets, there is a risk of bad debts of accounts receivable; the risk of high customer concentration.