Event: the company released the annual report for 2017 and the quarterly report for 2018, with revenue of 2.221 billion yuan in 2017, an increase of 8.98% over the same period last year, and a net profit of 404 million yuan, an increase of 18.83%. In the first quarter of 2018, the company realized revenue of 538 million yuan, up 52.74% over the same period last year; and realized net profit of 98 million yuan, an increase of 39.73% over the same period last year.
Main points of investment:
The provision of bad debts has led to a decline in 17 years of homed net profit (which is expected to be reversed in 18 years), and 18Q1 sets the tone for high growth throughout the year. Compared with the performance of KuaiBao, the company's 17-year return net profit decreased by 43 million, mainly because some accounts were not received in 17 years, but the customers are of higher quality, and we expect to be able to recoup it in 18 years. At the same time, the company's higher-than-expected 18-year quarterly report indicates that the company's full-year performance is expected to grow high, and we expect 18-year net profit to maintain a 30% growth.
Gross profit margin and net profit margin continued to rise, and operating cash flow improved significantly. In 17 years, the company's gross profit margin was 41.63%, an increase of 0.5pct over the same period last year; sales expenses and management expenses decreased by 0.51pct and 1.12pct, respectively, with a total decrease of 1.63pct; and the net profit rate was 18.66%, an increase of 1.58pct over the same period last year. If the impact of bad debt provision is taken into account, the net profit margin is even more obvious; the company's gross profit margin and net profit have maintained a growth trend for three consecutive years. In 17 years, the company invested 136 million yuan in R & D, accounting for 6.12% of revenue, and the scale and proportion of investment were basically the same as those in 16 years. Over the past 17 years, the operating cash flow of the company has been improving. The net operating cash flow of the company in the past 17 years is 137 million yuan, which is much better than that of 8.83 million yuan in the same period last year.
The smart conferencing business continues to grow strongly and is expected to grow by 30% in 18 years. From the perspective of business, the revenue of the company's intelligent conference business was 607 million yuan, an increase of 30.98% over the same period last year, and the gross profit margin slightly increased by 0.16pct; the revenue of the smart city business was 1.167 billion yuan, down 0.87% from the same period last year, and the gross profit margin decreased slightly by 0.35%; big data's revenue was 284 million yuan, an increase of 6.75% over the same period last year, and the gross profit margin increased by 4.49pct The revenue of the online education business reached 129 million yuan, an increase of 35.71% over the same period last year, and the gross profit margin decreased by 6.78pct. The intelligent conference business sector continues to maintain high growth, mainly due to, on the one hand, relying on speech recognition, language conversion, speech synthesis and other technologies, artificial intelligence + conference products have made great progress, such as paperless conference systems, simultaneous interpretation products, etc.; on the other hand, the company signed agency agreements with American BOSE audio and German Brahler conference products to further enrich the company's intelligent conference product system. With the continuous development of artificial intelligence + conference products, we expect the company's conference business to maintain a growth rate of more than 50% in 18 years.
Big data's business continues to blossom and is expected to grow by 50 per cent in 18 years. The company's big data business is being gradually verified, successively landing on the benchmarking cases of the government side and the enterprise side, the first and second phase construction of the government-side social credit three-level platform (national, provincial and prefecture-level cities), and the social security video surveillance and analysis system. public opinion analysis and monitoring system, etc. The enterprise-side precision marketing service program of Bank of Beijing, China Southern Airlines Company mobile marketing and platform drainage service, micro-fund online customer acquisition marketing program, car-backed accurate customer acquisition scheme, and began to expand to mobile game channel promotion services, ofo data analysis services and other areas. In 17 years, the company's big data business grew by 50%. The reason why the subdivision of the business is not reflected is that most of the company's big data projects are still in the smart conference, education, smart city and other sectors. The recognition of many large commercial organizations and government sides in the industry shows that the logic of the company's big data business is being confirmed, and we expect big data's business to maintain 50 per cent growth in 18 years.
Valuation and investment advice: the company's EPS from 2018 to 2020 is expected to be 0.42,0.52 and 0.65 yuan respectively, and the current share price corresponding to PE is respectively times that of 23-19-15. Big data's business has expanded into finance, online games and other fields, making rapid progress and maintaining a "buy" rating.
Risk hint: big data's business progress is not as expected; the acquired subsidiary is not as expected after the bet expires.