1. Report background

According to the company announcement, the net profit attributable to shareholders of listed companies is estimated to be 30 million yuan to 40 million yuan in 2012, an increase of 20.13% 60.17% over the same period last year.

2. Our analysis and judgment

(1) speeding up the structural transformation of television business

The poor performance of the company's TV business in the past is mainly due to the fact that the company has lagged behind its competitors in the transformation from CRT to LCD TV. Since 2012, the company has accelerated its internal restructuring, increased the proportion of LCD TVs, and improved its product structure, which is the main reason for the improvement of the company's performance in 2012.

(2) the environment of the black electricity industry is improving.

Since 2012, the competitiveness of Japanese color TV manufacturing has declined, providing opportunities for the expansion of domestic color TV manufacturing scale. Domestic upstream high-generation panels, open up the industrial chain on-line, conducive to the competitiveness of domestic enterprises. At the same time, the great development of e-commerce has opened up new channels for the sale of color TV sets, the absolute dominant position of home appliance stores has been shaken, and the bargaining power of the color TV manufacturing industry has been strengthened.

(3) the renewal project of the company's factory area is under way.

The relevant departments of Shenzhen have agreed in principle to the company's "renewal plan project". The construction area of the demolition land is 37000 square meters, the market price is about 20,000 yuan per square meter, and the land value is about 740 million yuan. the project is located as a comprehensive project such as business apartment, commercial office, business service industry, industrial R & D, industrial supporting and so on.

(4) the company has extremely low net profit margin, large room for profit improvement and great performance flexibility.

The company's net interest rate is very low. At present, the net interest rate is only 0.1%, which is much lower than that of other competitors in the industry. The lower net interest rate is mainly due to the low product positioning of the company, resulting in the average price lower than the industry average and the low market share of the first and second tier. Since 2012, the company has increased product research and development, cloud TV, dual channels and other new products are in the forefront of new technologies in the industry, the company's profit level, there is great room for improvement, performance flexibility.

(5) to adapt to the upgrading of consumption and enhance the space for development with new technologies.

Konka is in the forefront of the industry in cloud TV technology, comprehensively developing cloud TV, the intelligence represented by cloud technology conforms to the consumption upgrading and technology development trend of color TV industry, the company has signed a cooperation agreement with CNTV to expand the field of digital electronics, and the future market prospect is promising.

3. Investment advice

Taken together, the company's revenue in 2012 and 2013 is expected to be 182 yuan and 20.3 billion yuan respectively, up 12% and 12% year-on-year respectively, net profit up 20% and 241% respectively to 30 million yuan and 100 million yuan, and EPS of 0.03 yuan and 0.09 yuan respectively. At present, the company's PB is 1.1x, which is significantly lower than that of its main competitors, and PB has a high margin of safety. The company's net interest rate is only 0.1%, the profit is flexible, and it is given a "neutral" rating.