Incident: Recently, China Mobile announced the winning candidate for GPON equipment centralized procurement in 2018. ZTE won the bid with a large share, and the cumulative share is expected to exceed 70%. Comment: 1. ZTE plans to win a large share of China Mobile GPON collection, which is expected to push Dongzhi orders to resume. Tefa Dongzhi is a mainstream OEM manufacturer of equipment related to smart home gateways in China. ZTE is the company's largest customer. In 2017, ZTE's business accounted for 57% of Tefa Dongzhi's total revenue. Since the first half of the year, due to the impact of the ZTE embargo earlier, some of the company's production capacity corresponding to the ZTE business has been vacant. On July 13, the US Department of Commerce officially terminated restrictions on ZTE. With the lifting of the ban on ZTE, businesses such as supply chain procurement, which had previously been suspended, are expected to normalize. Judging from the bid situation that ZTE plans to win, there are a total of two bid sections: where the bid price for section 1 is 487 million (excluding tax), ZTE has received a share of not less than 70%; and the third bid price is 33.23 million yuan, and ZTE has won the full share. We believe that Tefa Dongzhi, as ZTE's mainstream supplier, may benefit from ZTE's large-scale procurement bid and drive the resumption of orders and vacant production capacity. 2. The optical communication business is expected to benefit from the release of production capacity; the military informatization business continues to expand. In recent years, with the development of China Mobile's own home width business, its procurement of smart home terminals has gradually increased. In the context of booming demand, the company is actively expanding foundry production capacity and driving revenue from related businesses to increase. In terms of military informatization business, the company plans to further expand its reach in this business through the acquisition of Shenzhou Aviation in the near future. Shenzhou Aviation is mainly engaged in research and product production of military computers, military bus testing and simulation equipment, etc., and collaborates with Chengdu Fourier in terms of business. If this acquisition is successfully completed, it is expected to push the competitiveness of the company's military informatization business to a new level. 3. Investment advice. Maintaining a highly recommended company's current stock price partially reflects the decline in market expectations for the company since the previous trade friction between China and the US and the ZTE embargo. Subsequently, with the lifting of the ban on ZTE and the resumption of upstream procurement, the company's related business is expected to continue to improve and drive basic improvements. Furthermore, the military informatization business opens the company's development boundaries and is expected to create a new growth pole. We expect that from 2018 to 2020, the company will achieve net profit of 334 million, 456 million and 560 million respectively, corresponding to the current stock price PE of 14x, 10x, and 8x, respectively. Maintaining a highly recommended rating. Risk warning: military orders fall short of expectations, operator smart home terminal tenders fall short of expectations, operator smart home terminal tenders fall short of expectations
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特发信息(000070)简评:特发东智有望受益于中兴大份额中标中移动GPON集采 带来订单恢复改善
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