Focus on the production of identification terminal equipment and seek integration of software and hardware: the company focuses on the field of identification, and uses three main types of products: card authentication terminals, cards and biometric authentication terminals, identity authentication and electronic payments, and corresponding industry solutions to provide services for “eight aspects of the four industries (finance, public security, communications and human society)”. The company has a wide range of terminal products. At the same time, it aims to integrate the needs of various industries through self-developed systems (software) layouts and collaborative terminal product delivery. In the future, the company seeks to integrate software and hardening in the field of identity recognition. New growth points.
The volume of the communications industry led to high performance growth in the first half of the year: the company achieved revenue of 167.9072 million yuan in the first half of the year, an increase of 63.39% over the same period last year, and achieved net profit of 23.1889 million yuan, an increase of 87.27% over the same period last year, the EPS in the first half of the year was 0.29 yuan. The communications industry was the main growth point of the first half of the year. Although policy-driven demand for the SIM card real-name system came later than expected, the market foundation still exists. The telecommunications industry initially made mandatory regulations to complete each network. The demand for additional equipment for subsequent business processing will drive the company in the second half of the year and next year Performance growth.
Industry liberalization has had limited impact on companies, and differentiated products have improved performance: After 14 years of industry liberalization, the market is concerned that industry competition has intensified and the company's performance falls short of expectations. In this regard, we think 1. The two foundations of identity authentication reading machines: security modules (689.1 yuan) and encryption fees (45 yuan). The average price of basic new products is around 1,000 yuan. The existence of hard demand determines that there is limited room for future price reductions for basic products; 2. Although the number of enterprises with production qualifications has increased from the initial 10 to more than 30, most of them mainly produce basic products. At the same time, the number of enterprises with production qualifications has increased from the initial 10 to more than 30, at the same time, For example, new entrants such as Nantian Information and Yi Lianzhong are not based on their main business. The company's product categories are rich and can also provide system services. In terms of professionalism and subsequent product upgrades, downstream users first consider the company. Maintaining a stable market share and purchase orders from the communications industry can indicate the company's competitive advantage; 3. Influence of factors such as policy drivers and industry changes in the downstream market is expected to drive performance growth. Differentiated products targeting different fields such as fingerprint recognition, face recognition, and electronic payments will increase the company's current gross margin level.
Profit forecast: The company's fund-raising project is expected to be fully put into operation in 17. The additional production capacity will ease the pressure on existing production capacity and bring benefits. We expect the EPS for 15-17 to be 0.59/0.74/1.01, corresponding to PE72/57/42 times. Considering factors such as intermittent explosive growth in the downstream industry and biometrics valuation premiums, etc., it is given a “neutral” rating.
Risk warning: Competition in the industry is intensifying and the benefits of fund-raising projects fall short of expectations.