1. Event

According to the annual report released by the company in 2015, the company's revenue in 2015 was 203 million yuan, down 23.01% from the same period last year, and the net profit returned to its mother was 4.8996 million yuan, down 74.96% from the same period last year.

two。 Our analysis and judgment

(1) accelerate the strategic transformation in 2015 to serve the robot + AR

In 2015, the company is in the stage of transformation and upgrading, and the annual report results are in line with market expectations. The overall demand growth rate of the traditional main large screen splicing products and solutions has slowed down. The new business robot industry is in the early stage of R & D and promotion, and its contribution to the company's performance is limited. The company's vehicle self-balancing ambulance platform products have not yet been test-sold, and the sales of the "mobile police platform" series of products have not met expectations.

We can see that the company's Dabing splicing business has successfully undertaken a number of projects, such as the National Deep-sea Base, Jiangxi Provincial Public Security Department, Jilin Province Water Conservancy, Harbin Traffic Police, Xinjiang Autonomous region Gaofa, Changsha Metro, Ningbo Traffic Police, General staff Department, Comac Center and so on. And won the Beijing high-speed rail passenger transport command center 80-inch 200 units splicing display project and successfully installed the ceiling in early 2016 Another world-class industry benchmarking project has been established for GQY Video.

While actively promoting the research and development of the "vehicle self-balancing Ambulance platform" project, the company's robot R & D team demonstrated the company's independent innovation capability with the latest achievements of "IMU High Precision Inertial Measurement Unit" and "EtherCAT Serial Communication Gateway".

The company signed a memorandum of cooperation with the Robotics Laboratory of Stanford University, and the two sides carried out technical and application cooperation on intelligent robots in the fields of deep water, mining and emergency rescue. further promote the development and growth of the robot industry through the integration of overseas resources

The company's intelligent service robot development strategy is: (1) special robots dominated by transportation and rescue; (2) service robots focusing on bank and hotel services; and (3) medical robots in surgery and rehabilitation aimed at health care. We believe that the company's transformation into intelligent service robot + AR will open up room for growth.

(2) the chairman's commitment and budget forecast substantial growth in performance in 2016

The board of directors of the company received a notice from Mr. Guo Qiyin, the actual controller, chairman and general manager of the company on January 6, 2016. Mr. Guo Qiyin promised that "on the basis of 2014, the growth rate of the company's net profit belonging to the shareholders of the parent company in 2016 will not be less than 53.34%, that is, the company will achieve no less than 30 million yuan of net profit belonging to the shareholders of the listed company in 2016." If the net profit of the company belonging to the shareholders of the listed company in 2016 is less than 30 million yuan, I will make up the performance difference to the listed company in cash. " We believe that the actual controller of the company has sufficient confidence in the future of the company and does not rule out the possibility that the performance will exceed expectations.

Company annual report announcement: the main contents of the company's budget plan for 2016 are: the budgeted operating income is 342.52 million yuan, an increase of 68% over the same period last year, the consolidated operating profit is 37.82 million yuan, and the budget belongs to the parent company's net profit of 30.8 million, an increase of 529% over the same period last year.

(3) invest in US Meta; and cut into the 100 billion US dollar AR market.

Meta is a high-tech company focused on research and development, specializing in wearable augmented reality (Augmented Reality) smart devices and ecosystems, providing support platforms for AR smart glasses, SDK development tools, and complete hardware and software for AR applications. According to the company announcement, Meta currently has the most advanced augmented reality technology and products in the world. Steve Mann, chief scientist of the Meta team, is known as the "father of wearable computing", whose research results on wearable computing are 30 years earlier than Alphabet Inc-CL C; lead consultant Steve Feiner is known as the "father of augmented reality".

AR technology can fuse and display different data, and can be combined with e-commerce, commodity advertising and O2O; AR hardware is a tool, an alternative to mobile phones, and a wide range of applications. It is estimated that the AR market revenue in 2020 is expected to reach 120 billion US dollars, which will be higher than the VR market revenue of 30 billion US dollars.

By investing in Meta to join the AR ecosystem, GQY Video combines Meta's AR technology with GQY Video's large-screen integrated display technology to form characteristic display applications, expand the application market, upgrade the traditional main business, and open up new growth points.

Recently, at TED 2016 in Vancouver, Canada, the founder of Meta, a well-known AR company in the United States, showed off a new generation of Meta 2 augmented reality glasses. Meta 2 can expand people's senses and allow users to load digital content in the physical world. The founder of Meta promised to let Meta employees work with their own products instead of monitors next year. At the same time, in the first quarter of next year, Meta will release its own AR glasses application development guide, detailing more details and guidance on interaction design.

As one of the top three AR opticians (the other two are Magic Leap and Microsoft Corp's HoloLens), Meta glasses can build holograms and allow users to use their fingers for real augmented reality applications. Magic Leap has not yet demonstrated the Demo of the product, while the product of Meta has iterated to META1--METApro--META2, and its new product has shown the market how AR technology enables people to interact with digital information in the real world.

(IV) significant progress has been made in personal / home service robot business by investing in Jibo

In 2015, the company invested US $1.4 million in Jibo, the world's first R & D and manufacturer of intelligent social service robots, accounting for 1.07% of its fully diluted stake, realizing an active exploration in the field of personal / home service robots and further consolidating the company's strategic deployment of technology integration on intelligent service robots.

Jibo is the world's leading R & D and manufacturer of intelligent household robots, with a core team from the Media Lab of the Massachusetts Institute of Technology. Cynthia Breazeal, founder and chief scientist of Jibo, is recognized as a pioneer of social robots, and his work is also regarded as a groundbreaking achievement in the field of social robots. According to the company announcement, Jibo Robot is the world's first social robot with artificial intelligence and has entered the stage of mass production preparation, while Jibo Robot's SDK is an open software development platform that can be developed and used by robot enthusiasts around the world.

According to the announcement, Jibo expects to sell 58083 Jibo robots in 2016, generating revenue of US $46 million and a profit of US $13.5 million. Sales are expected to reach 249771 units in 2017, with operating revenue of US $216.31 million and profits of US $91.69 million. Jibo company's growth and profitability are extremely outstanding.

Through this investment, the company will participate in the research, development, production and manufacturing of the world's leading intelligent social robot products, which will further consolidate the company's strategic deployment in intelligent service robots. The company has advantages in robot hardware and marketing planning in the Chinese market. Combined with the advantages of Jibo's artificial intelligence and software platform, the two sides will carry out rich forms of cooperation in the Chinese market. We judge that this investment is only the beginning, and the company will have further cooperation with Jibo in the future. At the same time, at present, the company has more than 600 million yuan in cash, and we think that the company will not rule out the possibility of adding more intelligent robot business through epitaxial mergers and acquisitions in the future.

(5) full reserve of intelligent robot technology and accelerated landing of new products

At present, the company has sufficient technology reserves, and through a strong combination with overseas teams, universities and research institutes, we have acquired the core technologies of the robot industry, such as ① intelligent robot drive mechanism; ② low-voltage servo driver; ③ inertial sensor technology; ④ multi-axis robot motion planning and control; ⑤ robot navigation and positioning; ⑥ based on the Internet of things cloud robot platform.

Product aspect:

Medical robot-a special robot product prototype based on vehicle self-balancing rescue platform is expected to be launched in the second half of the year. On August 15, 2014, the company invested and established Shanghai New era Robot Co., Ltd., a wholly owned subsidiary of special robots, focusing on the research, development, production and sales of vehicle self-balanced ambulance platform. its main robot project is "Research and Development of the first prototype of vehicle self-balanced Ambulance platform". This product uses the key technologies of service robots, such as new parallel robot technology platform, perception technology, human-computer interaction technology, etc., and can actively counteract the influence of inertia movements such as road bumps, car body shaking, car body acceleration and deceleration, etc., to ensure that medical staff provide simple rescue to critically ill patients on ambulances to avoid secondary injuries during transit. The product prototype will be launched in the second half of 2015.

The "vehicle self-balancing Ambulance platform" uses the key technologies of a new parallel robot, which can actively counteract the effects of inertia movements such as road bumps, car body shaking, car body acceleration and deceleration, and can be used for medical and patient transport and simple rescue. At the same time, it can also be widely used in luxury cruise ships, saloon cars and other high-end car anti-corona bed, ambulance stretcher multi-degree-of-freedom damping support, vehicle radar antenna, camera stabilization platform and other application scenarios. The product adopts the world's first multi-dimensional damping method based on self-balancing technology, and its self-balancing design is original in the industry. This product plans to achieve small batch trial sale in 2016.

Special Robot-Deepwater Robot: GQY has signed a memorandum of cooperation with Stanford University Robotics Lab to develop deepwater robots and will participate in deepwater experiments in France next month. The project is supported by the French government. The deep-sea robot will carry out submarine exploration operations below 100m through image visualization, and the flexible fingers of the robot can complete the task of collecting samples and carry out various physical measurements in multiple marine ecosystems. The deep-sea robot can carry out autonomous attitude control, or through underwater wireless communication, the operator uses the arms of two robots with force feedback and tactile sense to teleoperate the underwater robot. Below 100m is very complex, and video transmission and operation have not been realized on the seafloor up to now.

Special robot-mine and emergency rescue robot: jointly developed with several laboratories of bionic robot at Stanford University, the world's top and cutting-edge technology, including research and development funding provided by Middle Eastern oil countries.

Special robot-GQY mobile police platform: Tiananmen Square is also in use, some anti-terrorism equipment, police equipment, has begun to sell.

According to the customized needs of customers, the series of mobile police platform products are divided into intelligent single police patrol platform, intelligent single police anti-terrorism platform, intelligent traffic police platform and other products. it can be widely used in square patrol, airport security, meeting security, road command, road monitoring, security prevention, etc., as a means of transportation for police personnel, it can greatly improve the convenience of law enforcement and effectively prevent hidden dangers of public safety. And ensuring the safety of people.

Since 2014, GQY Video has signed a business cooperation agreement with related parties, New Century Robots, and gradually launched agent sales activities for a series of mobile policing platform products, making use of the respective technological and market advantages of both partners to achieve complementary advantages and resource sharing, and bring a new revenue channel for GQY Video.

Service robot-iGO will be promoted soon: the civilian product iGO will be released at the end of October, focusing on the campus, the price is very low, thousands of yuan, so that college students from dormitory to classroom, from classroom to restaurant, very easy to reach, instead of bicycles.

In 2015, the company also launched two modular products for the core components of intelligent robots-the IMU high-precision inertial measurement unit, a miniature, high-performance, industrial-grade inertial attitude measurement system based on MEMS, and the EtherCAT serial communication gateway, which converts serial communication into EtherCAT communication, which allows users to connect the device to the EtherCAT network.

(6) China will become the largest market for robots, and the market prospect of service robots is promising.

China will become the largest market for robots, and the market prospect of service robots is promising. The global service robot market will reach 200 billion in 2014-2017, only 30 billion in 2013, and the compound growth rate in the next three years will reach 22%. The growth rate of the Chinese market is much higher than the global growth rate. We estimate that the global market demand for service robots will exceed 1 trillion in the next decade.

The national "Twelfth five-year Plan" for the development of service robot science and technology points out that the service robot industry should be cultivated into a strategic new industry in China in the future. The special project will focus on the deployment of "one goal, three breakthroughs and four major tasks". The four major tasks are to focus on the development of public safety robots, medical rehabilitation robots, bionic robot platforms and modular core components.

The global service robot industry is divided into professional service robots (special robots) and personal and family service robots.

Home service robot and site professional service robot have a high degree of intelligence, which is expected to become an intelligent terminal entrance and intelligent home platform, with huge development space in the future.

The development of service robot will be from simple to complex, from easy to difficult. The application scene of cleaning robot is simple, and it is optimistic that it will take the lead in the outbreak; surgical robots and military robots have advantages and characteristics beyond human power, and they are expected to be popularized rapidly after the cost is further reduced and the function continues to be enhanced.

(7) to set up investment subsidiaries to speed up industrial integration in areas such as intelligent service robots.

In 2015, the company set up an investment subsidiary Shanghai Tianchi Investment Co., Ltd. with a registered capital of 20 million yuan (increased to 60 million yuan) in the Shanghai Free Trade Zone, as an important industrial investment platform at home and abroad, with the goal of absorbing high-quality resources upstream and downstream of the company's industry, grasping industrial investment trends, helping GQY Video to give full play to the economies of scale of enterprises, and forming a positive interaction between the company's industrial management and capital management. It provides all-round support for the future industrial integration of the company.

Shanghai Tianzhi's business scope includes: research and development, production and sales of robots and automation equipment; robotics technology, technology transfer and technical services.

(8) shareholders holding more than 5% of shares: promise that the share price will not be reduced until July 16, when the share price is less than 50 yuan.

On July 16, 2015, the company received a letter from Mr. Yao International, a shareholder with a shareholding of more than 5%, on the commitment not to reduce the company's shares. Based on full confidence in the company's development strategy of transforming into a leading international intelligent robot company, Yao International continued to increase its holdings of 2.57 million shares from June 29, June 30, July 1 and July 15, 2015. and continue to increase holdings in the future according to market conditions.

Yao International promised not to reduce its shares in the company in the next six months from July 16, 2015; if the stock price of the company does not reach 50 yuan in the next 6-12 months, it will not reduce its shares; in the next 12-24 months, if the stock price of the company does not reach 80 yuan, it will not reduce its shares.

As of September 30, 2015, Mr. Yao International held 2.57 million shares of the company through the general securities account, accounting for 1.21% of the total share capital of the company; 10618888 shares of the company through the customer credit transaction guarantee securities account of China Galaxy Securities Co., Ltd., accounting for 5.01% of the total share capital of the company; a total of 1318888 shares of the company, accounting for 6.22% of the total share capital of the company.

According to the company announcement: Yao International is optimistic about the future development prospects of the company and the growth space of the intelligent robot industry. Between April 7, 2015 and May 21, 2015, through the customer credit transaction guarantee securities account of China Galaxy Securities Co., Ltd., the company's shares were increased by centralized trading, accounting for 5.01% of the total shares. the details are as follows: 7488800 shares were purchased between April 7 and April 30, 2015. The price range of increasing holdings is from 17.99 yuan to 21.06 yuan. 3130088 shares were bought between May 4 and May 21, 2015, and the price range is from 18.01 yuan to 26.16 yuan.

We are concerned that Vcanbio Cell genetic Engineering Co., Ltd. (600645) became the fourth largest tradable shareholder of GQY Video in GQY Video's mid-2015 report, holding 2.08 million shares, accounting for 0.98% of the total share capital.

We are also concerned that the listed company Vcanbio (600645) received a voluntary gift of RMB 1 million from Mr. Yao International to the company on May 5, 2015, specifically for the company's R & D expenditure in the field of new generation CAR-T immune cell therapy technology. Vcanbio (600645) 2014 Annual report shows that at the end of 2014, Yao International held 5.07 million shares of Vcanbio, accounting for 1.44%, making it the fourth largest tradable shareholder of Vcanbio and the only individual investor among the top 10 tradable shareholders, with a market capitalization of about 200 million yuan.

3. Investment suggestion

The company is committed to building a leading enterprise with an annual output of 10 billion intelligent robots, focusing on special robots, service robots and medical robots. The company has a market capitalization of 4.7 billion yuan and has 500 million yuan in cash. It is expected that in the future, the company will continue to add intelligent robot and AR business through endogenesis and epitaxy. We are optimistic about the development prospect of intelligent robot + AR industry and maintain the company's "cautious recommendation" rating.