The performance is consistent with the forecast and the "neutral" rating is maintained.
In 2017, the company's revenue increased by 38.6% to 960 million yuan compared with the same period last year, and the net profit decreased by 55.2% to 59 million yuan. The net profit after deducting non-return was changed from a profit of 100 million to a loss of 250 million yuan. The gross profit for the current period increased by 21.5% over the same period last year, and the gross profit margin decreased by 4.2 percentage points to 30.0%. 1Q18, the company's revenue fell 5.3% year-on-year to 1.69 billion yuan, net profit decreased 46.3%, gross profit fell 3.6% year-on-year to 31.0%, gross profit decreased 15.2%. The 2017 performance declined due to the impairment of goodwill, while the 1Q18 performance was located at the lower edge of the forecast range, mainly due to the decline in business revenue and rising fees during the period, which was in line with expectations and maintained a "neutral" rating.
Transformation from logistics service to information service
In 2017, the company's revenue growth was mainly due to the 47.6% year-on-year increase in revenue from the information services business, and the proportion of operating revenue increased to 60.1% from 56.4% in 2016. Revenue from logistics services increased by 27.0% over the same period. In terms of service products, revenue from mapping and data, supply chain, integrated logistics, intelligent mobile and commodity sales increased by 391.4%, 129.4%, 23.5%, 20.6%, 78.0%, respectively, from 10.8% in 2016 to 38.3% in 2017. The revenue scale is close to that of integrated logistics (38.6%), and the company is rapidly transforming into an information service-oriented enterprise.
A significant increase in logistics costs led to a decline in gross profit margin
The gross profit margin of the company fell 4.2 percentage points to 30.0% in 2017, of which the gross profit margin of logistics services fell 11.9 percentage points to 8.1% from 20.0% in 2016, which is the main reason for the decline in gross profit margin. In addition, the gross profit margin of the company's mapping and data products fell 2.2 percentage points to 36.6%. During the reporting period, the company's intelligent logistics park was put into production, and the higher cost at the beginning of the business was the possible reason for the decline in logistics gross profit margin. The impact is expected to be mitigated gradually as the volume of business increases.
Ploughing the Internet of things, looking forward to breaking out of the cocoon
The company's traditional integrated logistics gradually cooperates with the Internet of things, surveying and mapping and other fields, mastering the core technology through independent research and development, and actively carrying out business innovation in the traditional market guided by the "Internet of things + mobile terminal". The development and promotion of express logistics enterprises hand-held terminals, gantry leapfrog security inspection machines, automation desks and other hardware products. At the same time, the company relies on the data China "hundred School Project" project, through the integration of university and corporate resources, and the establishment of cooperation with high-quality partners in the industry, to jointly carry out the R & D and services of big data application in the industry, based on the integration of "Internet of things + industry application + big data", to create an integrated cooperation mode of industry-university-research in logistics, intelligent transportation and social public opinion analysis, and to build an Internet of things information collection system and other platforms. As an enterprise in the Internet of things industry, the new business is expected to break out of the cocoon.
Short-term performance to be verified, maintaining a "neutral" rating
Considering that the company is in the transition period of business strategy, the short-term performance depends on the progress of the follow-up project and needs to be verified. With the introduction of the 2018 performance forecast, it is estimated that the performance from 2018 to 2020 will be 160.19 billion yuan (before 2018-19e is 1.2pm 150 million yuan), corresponding to the average PE valuation of the comparable company 2018E is 29.3X, taking into account the fact that from the Internet of things and big data business, the company enjoys a 20% valuation premium of 30% over traditional logistics companies, that is, 35.2X-38.1X. Corresponding to the target price of 8.0-8.7 yuan (the previous value of 6.2-8.1 yuan), maintain the "neutral" rating.
Risk hint: surveying and mapping, big data business continues to be less than expected, traditional logistics business shrinks