1H17 income + 55.5%, return net profit + 69.4%

According to the company's 1H17 results, operating income increased by 55.5% year-on-year to 440 million yuan, gross profit increased by 81.8%, gross profit increased by 4.9% to 34.0%, and net profit increased by 69.4% to 58.532 million yuan. In the 2Q quarter, revenue increased by 93.2% over the same period last year, up 44.6% from the previous year, and net profit from home increased by 98.9% and 10.5% over the same period last year. At the end of 2016, the consolidated factors contributed to the main income and profit increment, and the endogenous performance growth was slightly lower than expected.

Grand plan to create and contribute to the increment of performance, endogenous steady growth

The business income of surveying, mapping and data services in the new consolidated table is 170 million yuan, accounting for 39.1% of the total income, 34.8% of the gross profit, 59.44 million yuan of gross profit, 40.1% of gross profit, 33.36 million yuan of net profit, 51% of Hua Pengfei Holdings, and 29.1% of the net profit contribution. Due to the continued compression of commodity sales business, after deducting the impact of consolidation, the company's revenue fell 5.3% compared with the same period last year, but the cost of smart mobile services decreased rapidly. in the current period, the company's gross profit increased by 8.9% compared with the same period last year, and its net profit increased by 20.2%.

Conforming to the intelligent trend of the logistics industry, the operation of the Internet of things continues to expand.

The company's strategy is clear that it will change from the current "service operation" to "data operation", steadily promote the transformation to intelligent logistics, take the logistics industry hand-held intelligent hardware as the carrier, and establish platforms such as the information collection system of IoT. Establish cooperation with customers by providing industry application services. At the same time, we will take advantage of the advantages in surveying and mapping technology acquired at the end of 2016 to lay out the application cooperation in the geolocation data service industry. In the current period, the company's revenue from smart mobile services increased by 3.1% year-on-year, benefiting from a gradual decline in cost-side expenses, gross profit margin increased by 13.1 percentage points to 65.3%, gross profit increased by 29.0%. It is expected that short-term projects are still in their infancy, revenue will remain stable, and there is still room for improvement in gross profit margin with cost control.

Comprehensive logistics multi-dimensional expansion, stable income

Multi-industry and multi-field expansion of integrated logistics services. The company's traditional integrated logistics services focus on high-end customers, and have signed annual framework cooperation agreements with well-known customers in communications, home appliances, power and other industries. In terms of business, express business has been carried out step by step, which has improved the freight transport efficiency of Shenzhen Zhifu, Xiamen lines and Jiangsu, Zhejiang and Shanghai regions. In terms of the industry, it has entered the field of logistics operation in the tobacco industry by holding Chengdu Delto Logistics. In the current period, revenue from the integrated logistics services sector rose 8.6 per cent to 170 million yuan from a year earlier, gross profit fell 2.0 per cent to 19.5 per cent, and gross profit fell 1.4 per cent year-on-year. In the future, with the growth of the scale of express business, the scale of revenue is expected to expand, and the contribution of gross profit will be slightly reduced due to the low profit of express.

Steady performance, intelligent logistics vision can be expected to maintain "increased holdings"

Macroeconomic stability superimposed express delivery to maintain a high growth rate, the company's traditional integrated logistics, data terminal business has risen steadily, sound performance. The company's development of intelligent logistics strategy is clear, the implementation ability is strong, although the short-term performance has not been shown, but considering that this direction is in line with the long-term trend of the industry, the company has the advantage of first-in, and has a premium over the general logistics enterprise valuation. On the reporting day, the overall 2017e price-to-earnings ratio of the II industry as a whole was 31.4X, giving the company a valuation premium of 25% 39.3X-42.4X, or price-to-earnings ratio. It is estimated that the performance in 2017-19 will be RMB 1.62 million (the previous value is RMB 17927), and the target price will be lowered to RMB 1.94-12.89, maintaining the overweight rating.

Risk tips: customers are more concentrated, large customer orders are reduced, and the development of the Internet of things is lower than expected.