Performance preview
Forecast profit is down 7479% from the same period last year.
The company forecast 18-year net profit of 82 million yuan to 98 million yuan, a decrease of 74% to 79% over the same period last year; deduction of non-net profit of-10 million yuan to 7.45 million yuan, a loss reduction of 100 million yuan to 110 million yuan; corresponding to 4Q18 single-quarter deduction of non-net profit of-7.45 million yuan to 2.55 million yuan, a year-on-year loss reduction of 1.68 million yuan to 1168 yuan, and a quarter-on-quarter loss reduction of-1.31 million yuan to 8.69 million yuan.
Pay attention to the main points
Cost control is effective, deducting non-net loss narrowing. Over the past 18 years, the company's loss of deducting non-net profit narrowed quarter by quarter, from 3.46 million of 1Q18's loss to 2.45 million of 4Q18's forecast central loss. The main reasons are: 1) after the company shrank its business front, the cost was effectively controlled, the cumulative sales expenses in the first three quarters decreased by 38% compared with the same period last year, the expense rate decreased by 6ppt, the management expense decreased by 54% compared with the same period last year, and the expense rate decreased by 26ppt. 2) the institutional business has been effectively expanded after the introduction of strategic shareholders. We believe that in the context of a recovery in the market and increased demand for financial data services, the company's business is expected to continue to improve.
Full calculation of litigation compensation, to achieve light combat. As of the date of announcement, the company's confirmed compensation for litigation matters is 90 million yuan (of which 30 million yuan has been paid), and the provision for the potential liabilities under consideration has reached 180 million yuan, which is relatively sufficient for light loading. At the same time, in October of 18 years, the company obtained a disposal income of 150 million yuan through the sale of 47.15% of Da Wisdom (Hong Kong) Investment Holdings, thus achieving 18-year profits and gradually eliminating the risk of delisting. We judge that in the context of the gradual easing of civil compensation litigation and the increasingly streamlined business lines, the company's 19-year main business is expected to reverse losses.
Valuation and suggestion
Due to the investment income from the sale of assets, we raised the company's 18-year profit forecast by 261% to 90 million yuan. Due to the uncertainty of 19-year asset sales, we lowered 19-year profit by 67% to 100 million, and introduced a profit forecast of 210 million yuan in 2020.
The company is currently trading in 2019e 66x, 2020e 31x Pram E. Taking into account earnings adjustment and valuation switching, we lowered the target price by 31% to 3.19 yuan, corresponding to the 2020 30x target Pmax E and 4% downside space, and maintained the "neutral" rating.
Risk.
Delisting risk; civil litigation compensation; capital market fluctuation.
