This report is read as follows:
5G has come, will open the trillion-level Internet of things market, Rihai Intelligent through smart city solutions to integrate superior business, enhance governance capabilities, performance outbreak singularity is just around the corner.
Main points of investment:
Maintain the "overweight" rating and raise the target price to 30.10 yuan (+ 1.5 yuan, + 5.2%). According to KuaiBao, Rihai Intelligent performance, the company's total revenue in 2018 is 4.766 billion yuan (+ 59.41%), and the net profit attributed to shareholders of listed companies is 155 million yuan (+ 51.44%), which is basically in line with market expectations. Based on the long-term benefits of KuaiBao's performance and the company's product strategy upgrade, we downgrade our profit forecast for 2018 and raise our performance forecast for 2020. it is estimated that the EPS for 2018-2020 will be 0.50,0.86,1.23 (+ 0.07 yuan). With reference to the principle of the lower of comparable valuation and EVA valuation, we give a valuation of 35 times in 2019, with a target price of 30.10 yuan.
Benefiting from the accelerated construction of 5G, the Internet of things industry is expected to break out. 5G is the key to the Internet of everything, and the core of the 5G R17 standard to be released in 2020 is the Internet of things. With the announcement of the investment plans of the three major operators in 2019, the construction cycle of 5G has arrived, and the progress of commercial plans continues to exceed expectations. As the most important application scene in the 5G era, the Internet of things industry has a huge market space and can be expected to break out.
Take the new smart city solution as the axis, integrate the advantages of the company's cloud + end + middleware, and pry the trillion-level market. According to the planning of the Ministry of Industry and Information Technology, the scale of the domestic Internet of things will exceed 1.5 trillion yuan and the number of M2M connections will exceed 1.7 billion in 2020. Since acquiring Xuntong, Longshang Technology and taking a stake in Ayla, Rihai Intelligence has formed a product model of cloud + end + middleware. The timing of the layout makes the company's position in China's Internet of things market irreplaceable. In 2018, taking the new smart city solution as the axis, the company will strengthen and upgrade its business model and achieve sales in Shanghai, Yan'an, Beijing and other cities, which will become an important force to promote the company's growth in the future.
Risk hint. The synergy of mergers and acquisitions fell short of expectations, and the decline of the company's traditional business accelerated.