Summary:
On the basis of the original LED main business, Lianjian Optoelectronics launched a cooperative relationship with the downstream media, actively expanded vertically to the downstream advertising media industry, and advanced to the goal of digital media empire through mergers and acquisitions of the media advertising industry.
The company has benefited from the outbreak of a small gap market. Lianjian Optoelectronics seized the market opportunity, and the company's LED business achieved great-leap-forward growth. As the effects of technology and production line investment are gradually released in terms of capacity improvement, the company's small-pitch LED products are expected to grow by 100% a year in the next three years.
With the expansion of sales scale and increasing orders of the three major sectors of digital display equipment, digital marketing and digital outdoor, the profitability and service ability of the company's intelligent marketing service group continues to enhance. In the first half of 2017, the company's digital marketing services segment achieved operating income of 761 million yuan, an increase of 131.46% over the same period last year.
In the future, the company will give full play to the advantages of technology, capital and scale, extend the marketing communication service industry while maintaining the growth of LED display equipment business, achieve coordination and complementarity among subsidiaries, and build a data-driven integrated marketing service group.
Profit forecast: we predict that the company's 2019 revenue will be 40.0,52.8 and 6.63 billion yuan, and the net profit belonging to the shareholders of the parent company will be 6.59,9.07 and 1.15 billion yuan, respectively, and the corresponding EPS will be 1.07,1.48,1.87 yuan respectively. Give a rating of "overweight".
Risk tips: 1) continuous high growth trend of small gap product revenue; 2) the profitability and service ability of the company's intelligent marketing service group are lower than expected.
