The performance is in line with expectations. The company released its annual report in 2017, with an annual income of 2.221 billion yuan, an increase of 8.98% over the same period last year, a net profit of 404 million yuan, an increase of 18.83% over the same period last year, and a net operating cash flow of 137 million yuan, an increase of 1452.55% over the same period last year. The profit distribution plan is to pay 0.57 yuan (including tax) for every 10 shares. The company also released its quarterly report for 2018, with revenue of 538 million yuan during the reporting period, an increase of 52.74% over the same period last year, and a net profit of 98.04 million yuan, an increase of 39.73% over the same period last year.
The control of cost and expense is better. 2017 in terms of cost, the company's gross profit margin increased by 0.50pct compared with the same period last year; on the expense side, the expense rate decreased by 2.50pct compared with the same period last year. The control of cost and expense is ideal.
Establish the new big data as an important business main line. According to the annual report, the annual income of Felix big data's business in 2017 was 284 million yuan. Through the accumulation of technology and resources, it formed a systematic intelligent service capability and market competitiveness. While providing technical support for other sectors of business, it expanded the markets of intelligent video applications, enterprise and government data governance and data asset management, and big data analysis services. Among them, 1) the application of intelligent video has been gradually developed in many fields, such as urban comprehensive governance, policing, tourism, enterprise customer service and internal control, with good market benefits and good market revenue prospects. 2) data governance and data asset management provide basic guarantee for enterprises and governments to improve data quality, strengthen data security, provide data sharing and create big data application model, and are the basic solutions for the integration of data resources of the government and large enterprises. it has a good market prospect. 3) big data analysis service began in 2015 and has become an advantageous project for Felix to provide high-quality data services to customers in government, finance, aviation, automobile sales and other fields.
Business collaboration is expected to accelerate. According to the annual report, by the end of 2017, the gambling period of wholly-owned companies acquired by the company through major asset restructuring was over. In order to improve internal efficiency and strengthen unified management, the company plans to carry out a new term of senior management. After three years of integration and development, the company has formed a situation of obvious competitive advantages of various business sectors and benign coordination of the overall business. In 2018, we will accelerate the pace of business coordination within the group, promote the rapid integration of new companies into the Felix Group, and strengthen the management of the channel sales system covering the whole country.
Investment suggestion: the company's innovative development strategy of promoting intelligent conferences, smart cities and Internet education with cutting-edge technologies such as big data and artificial intelligence has become increasingly clear. It is estimated that the EPS from 2018 to 2019 will be 0.36 yuan and 0.47 yuan respectively, with a "buy-A" rating and a 6-month target price of 12 yuan.
Risk hint: M & An integration is lower than expected; market competition intensifies