The performance is in line with expectations. In the first three quarters of 2018, the company achieved revenue of 3.707 billion yuan, an increase of 280% over the same period last year; net profit of 262 million yuan, an increase of 268% over the same period last year; and net profit of 350 million yuan to 410 million yuan, an increase of 45% to 69% over the same period last year. This is mainly due to the overall revenue growth brought about by the implementation of project orders.
Operating cash flow is positive. The company has strengthened its contract payback this year, and the net operating cash flow in the first three quarters of 2018 has increased by 910.133 million yuan over the same period last year, an increase of 101.82%.
Acquire part of AgJunction's business and enter the global precision agriculture market. Hemisphere GNSS, a wholly owned subsidiary of the company, announced that the company will acquire some of the businesses of Canadian listed company AgJunction, including all the channels, brands, facilities and human resources of its Outback Guidance business. Through this acquisition, the company's technical strength in the field of mechanical control has been strengthened, and it is expected to better integrate satellite navigation technology and high-precision automatic steering technology. the company's core competitiveness in precision agriculture and machinery control will also be greatly enhanced. At the same time, this acquisition is also an important step for the company to develop its global business.
Investment suggestion: the company will continue its high growth trend in 2018, and its business line will blossom at many points. We believe that the rich order reserve will ensure the sustainability of the company's high growth. It is estimated that the EPS in 2018 and 2019 will be 0.49 yuan and 0.78 yuan, maintaining the "buy-A" investment rating, with a 6-month target price of 16 yuan.
Risk hint: the development of Beidou industry is not as expected; the increase of financial expenses.