From January to September, Huasheng Tiancheng's operating income increased by 25.18% compared with the same period last year, and its net profit increased by 650.01% compared with the same period last year.
From January to September, Huasheng Tiancheng achieved an operating income of 3.946 billion yuan, an increase of 25.18% over the same period last year, and a net profit of 189 million yuan, an increase of 650.01% over the same period last year. Among the revenue sub-items, the income of enterprise IT system solutions was 3.497 billion yuan, an increase of 15.11% over the same period last year, which mainly came from increasing the development of new product lines with strategic partners and the in-depth exploration of old customers and new businesses; cloud computing products and services achieved revenue of 418 million yuan, an increase of 395.46% over the same period last year, which is due to two reasons: 1) Huasheng Tiancheng acquired GD company and reported thickening performance. 2) the company's own-brand cloud computing basic software and hardware products have entered a period of revenue growth.
Self-branded servers enter a period of revenue growth
From January to June 2017, the company achieved good results in sales of its own products, especially the number of newly signed contracts for independent Power servers increased significantly compared with the same period last year, and the performance is expected to double this year. Recently, Huasheng Tiancheng server and supporting software won the bid of ten million "Fengyun IV" satellite CNS application system, showing its strong competitive strength.
From January to September, the operating cash flow is-23.88% compared with the same period last year, but in the process of improvement
The net cash flow generated by Huasheng Tiancheng's operating activities from January to September was-333 million yuan, a decrease of 23.88% compared with the same period last year. The main reason is that the company has increased its R & D investment and salary expenditure. However, 2017Q3 generated + 50.88 million net cash flow of operating activities in a single quarter, while 2015Q3 and 2016Q3 generated a negative net cash flow of operating activities in a single quarter. We can find that the company's cash flow is in the process of improving.
The performance is expected to grow rapidly and maintain the "overweight" rating.
It is estimated that Huasheng Tiancheng's revenue for 17-19 years will be RMB 61.73 million, an increase of 28.6% over the same period last year. With the maturity of the company's own IT software and hardware and better integration with GD, we predict that the cloud computing business will steadily increase its gross profit margin while increasing its revenue share. It is estimated that the EPS for 17-19 will be 0.22, 0.24 and 0.36 yuan, corresponding to 46.9, 43.6 and 29.0 times of PE. The company's performance will maintain high growth and maintain the company's "overweight" rating based on business prospects and valuation levels.
Risk hint
The development of the company's cloud computing is not as expected, and the development of the investment target is not as expected.
