Summary of the report:
With the deep investment and control strategy, Guangdong-Hong Kong-Macau Greater Bay Area construction brings business opportunities, and the company comprehensively expands the business of smart city solution providers and construction and operation service providers to help urban construction in the Dawan area. In recent years, the market of China's security industry has continued to grow, from 328 billion yuan in 2012 to 620 billion yuan in 2017, with a compound annual growth rate of 14%. In 2017, Infineto signed and launched the 467 million yuan Smart City General contract Project and the largest face recognition system for a single project in the country, creating a precedent for large-scale application of An edge computing and face recognition in the security industry. At the same time, Shenzhen Investment Control Strategy to invest in Infineto, the company has state-owned capital background and resources, which is conducive for the company to undertake domestic government projects and participate in the construction of Shenzhen Investment Control Intelligent Park; Guangdong-Hong Kong-Macau Greater Bay Area construction will promote the rapid development of the company's smart city construction. The company's business is expected to continue to grow. The construction of smart cities is developing rapidly. The company's business is expected to continue to grow.
Intelligent security plus Internet digital marketing coordinated development. With the gradual increase of netizens in our country, the scale of digital marketing market is gradually expanding. From 2013, the scale of digital marketing in China is 101.2 billion yuan, and the market scale in 2017 is 314.7 billion yuan. In 2017, the subsidiary Xinpu Interconnection grew rapidly with its deep precipitation in the field of search engine marketing, the technology and resources in the field of mobile Internet, and the expansion of information flow marketing business. In the third quarter of 2018, the operating income of the company's digital marketing section was 870 million yuan, an increase of 110.13% over the same period last year, accounting for 55.04% of the company's overall operating income, which has become an important source of the company's business income.
Investment advice and rating: the company is expanding from product sales to smart city solution providers and construction and operation service providers with "people connected" as the core. We believe that the company will continue to benefit from the smart city, the rapid growth of the intelligent security industry and the continuous expansion of the Internet digital marketing market, the project resources and support brought by the deep investment control strategy, the business opportunities brought by the construction of Guangdong-Hong Kong-Macau Greater Bay Area, and the future performance is expected to enter a period of rapid release. It is estimated that the EPS from 2018 to 2020 is 0.12 PE 0.15 0.20 yuan, corresponding to 42-35-25 times, highly recommended. Give a "buy" rating.
Risk hint: the competition in the industry intensifies and the progress of the project falls short of expectations.