Events:
The company released its 2018 annual results on February 28, KuaiBao said that the net profit attributable to the owner of the parent company in 2018 was 155 million yuan, an increase of 51.44% over the same period last year, and operating income was 4.766 billion yuan, an increase of 59.41% over the same period last year. Basic earnings per share was 0.5 yuan, an increase of 51.52% over the same period last year
Main points of investment:
The transformation of the company has been completed, and the business share of the Internet of things is growing rapidly.
Since 2018, the company has entered the fast lane of the development of the Internet of things. On the basis of adhering to the strategic positioning of artificial intelligent Internet of things, on the one hand, it speeds up the industrial layout of the Internet of things, revolves around the strategic advantage of "cloud + end", and promotes cloud convergence. In the past 18 years, the business income of artificial intelligent Internet of things has exceeded that of traditional communication equipment manufacturing and communication network engineering services. It has really realized the transformation of the company to an Internet of things company with intelligent comprehensive solution. On the other hand, we use the core Internet of things business to accelerate the transformation of traditional communication basic business to intelligent manufacturing, intelligent engineering services and other fields, and make business breakthroughs in smart cities, smart suites, intelligent logistics and other multi-leader cities. In the past 18 years, the company's total operating income increased by 59.41% compared with the same period last year, and the net profit belonging to shareholders of listed companies increased by 51.44%. The growth in revenue and net profit mainly comes from the consolidation of the Internet of things business (Xuntong in March 2018 and Longshang Technology in November 2017), and the rapid growth of Internet of things solution business. based on the Internet of things, the second generation of new smart city solutions are sold in Shanghai, Yan'an, Beijing and other cities, as well as the number of cloud platform connections and cloud service revenue from scratch. It has achieved rapid growth from small to large. At the end of 18, the company's total assets increased by 38.44% compared with the same period last year, and the net assets belonging to shareholders of listed companies increased by 12.26% year-on-year, mainly due to the increase in the scope of subsidiary companies and the rapid development of the Internet of things business. On the whole, the company has basically completed the transformation and has embarked on a rising channel of rapid business development.
Optimize the internal business structure and enhance the comprehensive competitiveness
At present, the company forms the "three carriages" business income structure of the Internet of things, integrated communication services and communication equipment. While continuously providing Internet of things wireless communication modules, Internet of things cloud platform and intelligent Internet of things end-to-end solution services for the three major telecom operators and customers in various vertical industries, the company also provides operation and maintenance services for the three major telecom operators and China Tower Corporation, actively promoting the innovative transformation of traditional business, enabling traditional products and realizing the intelligence of traditional products. Based on the needs of transformation, the company takes the market as the orientation, strengthens R & D investment and technological innovation, develops core technology independently, and reduces costs and improves R & D efficiency by opening product lines, integrating teams, reducing costs and improving R & D efficiency. Ella, Shenzhen Cloud R & D Center and Internet of things Terminal solution Business Department have been effectively integrated, greatly speeding up the development cycle of intelligent Internet of things products and improving the company's comprehensive competitiveness.
5G business has ushered in a new era of Universal Intelligence and ubiquitous intelligence. the scale of wireless connections will grow exponentially-the whole market space will exceed 1.7 trillion US dollars in 2020, and the number of related connections will reach 20.4 billion. As a result, the pattern of the communication module market has changed greatly, and the market will be further concentrated and the competition will be more fierce. For this reason, the company has set up a module business group to further consolidate the "cloud + end" business advantage layout and communication module leading enterprise position. At present, the annual shipment of the company's modules is about 5000 million pieces. on the basis of consolidating the domestic market, we will speed up the development of the international market this year and next, form a global marketing network and brand building, and break through the 100 million piece shipment mark by 2020. and in the future is expected to achieve 40% 50% of the global module market share.
Seize the opportunity of 5G Industry and vigorously develop Intelligent Mobile Terminal
19 years is the beginning of 5G construction. In the face of the development and opportunities of 5G industry, the company prepares for the explosion of intelligent scenario application coming from 5G by laying out the business of Internet of things, edge computing and artificial intelligence; at the same time, it increases investment in research and development, promotes the intellectualization of communication equipment manufacturing and engineering services, and makes full preparations for the arrival of 5G construction period while improving product market competitiveness. At present, the company has carried out R & D and layout in the direction of 5G small base station, 5G cloud module, 5G intelligent terminal, and deep integration of 5G and AI. At present, as the development of the Internet of things is not balanced, and the homogenization of end-to-side module products is serious, the company regards "AIoT" as a breakthrough way, by implanting "brain" on edge devices to make terminal devices break through the original functional limitations and integrate AI, with powerful functions such as high computing power, high bandwidth, mobile network support, streaming data analysis, complex event processing and other powerful functions, suitable for various intelligent application scenarios. With the rapid development of 5G network construction, the company will create more comprehensive products and solutions to create value for customers based on cloud platform, intelligent terminal, artificial intelligence and big data in the 5G era.
Profit forecast and rating
Considering that the company currently takes the general service business as the performance basis, accelerate the completion of the layout of the whole industry chain in the field of the Internet of things, and the intelligent terminal launched by AI is expected to get the first opportunity in the 5G era, and on the basis of relying on the intelligent network construction of operators, the company is expected to enter a period of rapid growth in performance in the next 2-3 years, and revenue and net profit will be strongly improved. We expect the company's performance in the next three years to show rapid revenue growth, with revenue of 6.911 billion yuan and 9.191 billion yuan respectively in 2019-2020, and net profit of 283 million yuan and 430 million yuan respectively.
Risk hint: the market development of the Internet of things is not as expected, and the construction of 5G network is not as expected.