Main points of investment
The performance forecast was lower than expected, mainly because the company was a leading provider of software and hardware for radio and television digital TV with a share payment of 49 million yuan. Due to factors such as the decline in the prosperity of the industry and the write-off of goodwill in 2017, the net profit of 36.5 million decreased by 84% compared with the same period last year. It has entered a new growth period since 2018, with a net profit of 84.13 million yuan in the first three quarters, 2.3 times that of 2017. The annual net profit of 2018 is expected to be 8000-90 million yuan, an increase of 119.20-146.60% over the same period last year, and the performance growth rate is lower than expected, mainly because the share payment fee is about 49 million yuan to the capital provident fund subject. If this effect is excluded, the company will achieve a net profit of more than 130 million yuan in 2018.
Radio and television participate in the construction of 5G to consolidate the company's performance foundation
The Ministry of Industry and Information Technology agreed to participate in 5G construction last year, and State Grid is applying for mobile communications qualification and 5G license. At the recent 2019 annual work meeting, the State Grid Company pointed out that in 2019, we should take the construction of the radio and television 5G network as an opportunity to speed up the mobile upgrading of the radio and television network and improve the overall prosperity of the industry. At present, more than 50% of the company's revenue comes from radio and television, and the improvement of the prosperity of radio and television ensures the company's performance without worries.
CA is still the main driving force of the company's medium-term growth.
Driven by the high-definition intelligent replacement of set-top box and the upgrade of Guomi, the number of CAS smart cards issued in 2018-20 is expected to increase by 26%, 39% and 48% respectively compared with the same period last year, entering the business cycle. The company's CAS smart card has the first market share in China, and the first provincial state secret CAS project in 2018 will fully benefit the development of the industry. At the same time, DRM copyright protection is expected to open a new space for development.
Profit forecast and valuation
Due to the influence of share payment, the company's profit forecast is adjusted. It is estimated that the return net profit of the company from 2018 to 2020 is 88 million yuan, 143 million yuan and 206 million yuan respectively, the EPS is 0.06,0.10 yuan and 0.14 yuan respectively, and the corresponding dynamic price-to-earnings ratio is 58,36,25 respectively.
Risk Tips:
The investment in the radio and television industry is not as strong as expected, and the number of CAS smart cards issued is not as expected.
