Main points of investment:
Dewey Video's main investment logic lies in laser display volume, IDC cost advantage and big data mining. The market may worry about slow growth in 12-14 years and a lack of executive power in the management team. We believe that the company has long been aware of the limitations of the main business, so it has been expanding its business around the edge of the traditional business, and finally located in the laser display, IDC, and big data business. we believe that the three core logic of the company's fundamentals remain unchanged and are being verified and implemented one by one.
Laser display began to increase the volume, A-share scarcity target. In the third quarter, the company began to sell laser display film projectors and engineering machines on a large scale, with a total sales volume of nearly 20 million. At the same time, it has completed the research and development of 6000 lumen single DLP and 12000 lumen 3DLP integrated prototypes. The company's laser display product market is expected to be in full swing in the future. The company is expected to sell 100 units in 2015, with revenue of 50 million yuan at an average price of 500,000 yuan per unit, and 250 million yuan in 2016.
It is expected that IDC business will achieve phased results next year, combining the three advantages of low cost of power, low cost of policy and low cost of optical fiber rental, and SaaS big data business will be developed in the future. The company's IDC data center is located in Ordos, where the regional electricity price can be as low as 0.20 yuan / kWh, while the electricity price in Shanghai and other cities can reach 0.8 yuan / kWh. Dewey Video and Chengyi Times signed an exclusive agreement for the use of the backbone network. It is expected that Dewey Video will rent the network to reduce the average monthly traffic fee to 22,000 yuan / G, while the industry average fee is about 100,000 yuan / G. In the future, the company is expected to use IDC-based data to target the SaaS level of big data mining and operating business. It is estimated that the company will have 8000 cabinets in 2016, with revenue of 624 million, accounting for 40.67% of the main business, with a gross profit of 250 million.
Maintain earnings forecast and reiterate "buy" rating. It is estimated that the annual income of the company from 2015 to 2017 is 6.5,15.34 and 2.084 billion yuan, the net profit is 0.28,2.48 and 365 million yuan, and the earnings per share is 0.09,0.83,1.22 yuan. The current stock price corresponds to PE of 272,30x and 20x in 2015-2017, and the company relies on smart city business to turn losses into profits in 2015. due to the greater flexibility of laser display and IDC business performance in 2016 and 2017, it is expected to further tap the value of IDC data in the future, giving the company a target market capitalization of 10 billion in the next six months.