Steady growth in performance and gradually increase investment in new business. In the first half of 2017, the company achieved operating income of 678 million yuan, an increase of 8.17% over the same period last year. The growth rate increased by 3.47% over the same period last year, and the net profit belonging to the shareholders of the parent company was 25.3319 million yuan, an increase of 39.09% compared with the same period last year. Although the company's performance is in a state of low growth, the growth rate has a clear upward trend. The company's comprehensive gross profit margin is 61.54%, and the comprehensive net profit margin is 3.72%, which is 1.29 and 0.84 percentage points higher than that of the same period last year respectively. The increase in net interest rate is mainly due to the increase in deposit interest received by the company and the decrease in financial expenses by 143.78% compared with the same period last year. In addition, sales expenses increased by 33.33% year-on-year, mainly due to the company's expansion of traditional business market share while increasing fund-raising projects such as network optimization, cloud security, smart city, and so on.
The traditional business has maintained a balanced development and the performance has been steadily advanced. In terms of traditional OSS, it realized the expansion of traditional network management to business management, connected Hubei Mobile dedicated line operation and maintenance platform and Chongqing Mobile dedicated line integrated support platform, and at the same time actively opened up new markets, forming OSS solutions and products for radio and television, railway, highway, government and enterprise industries. Smart City and Intelligent Transportation Business actively expand new market share, signing new contracts for mechanical and electrical engineering construction of Ya'an-Kangding Expressway Project in Sichuan Province, Shandong Ping an Rongcheng Integrated Management platform and other projects. to maintain the company's sustained growth in the field of smart city and intelligent transportation.
Continue to expand new business and explore new growth points of performance. Network excellent business successfully entered the China Telecom Corporation wireless network Xieyou enterprise qualification enterprise list, and actively expand the application of big data and artificial intelligence in network excellent business. Big data's market share has increased steadily, winning the bid for Hebei Mobile data center project in data center construction, Guangdong Mobile log analysis project and Shaanxi Mobile alarm data mining project in data mining analysis, as well as Hubei Mobile's B domain big data development framework, which is the company's first BSS field project, laying the foundation for the company's enterprise big data center market expansion.
Profit forecast and investment advice: the company's traditional business is developing steadily and new business is gradually advancing. It is estimated that the company's net profit belonging to shareholders of listed companies from 2017 to 2019 is 0.25,0.31,0.37 yuan respectively, while the current stock price corresponds to 44 times, 36 times and 30 times of dynamic PE, maintaining the "overweight" rating.
Risk hint: new business development is not as expected; technology upgrade risk
