Event description
The company released its 2018 annual report on April 18, 2019. During the reporting period, the company achieved operating income of 2.413 billion yuan, an increase of 24.25% over the same period last year; net profit of 26 million yuan, down 80.93%; and non-net profit of 123 million yuan, an increase of 54.14% over the same period last year.
Short-term performance under pressure, good cost control
During the reporting period, the main reason for the mismatch between the company's revenue growth rate and the return net profit growth rate was that the company fully provided Li Xinying's other receivables to the company in 2018, with a provision of 235 million yuan.
Although the full provision leads to short-term pressure on the company's performance, it reduces the uncertainty of future performance to a certain extent in the long run. In addition, based on the high R & D investment (R & D expenses increased by 34.65% compared with the same period last year), the company effectively controlled the cost side, and the management expense rate and sales expense rate decreased by 1.54pct and 0.43pct respectively in 2018, which will lay a solid foundation for high growth in future performance.
Join hands with giants to replicate model cities
The company has successively signed strategic cooperation agreements with Aliyun and Huawei. On the one hand, cooperation with giants can reflect the company's strong brand effect, on the other hand, based on the giant's unique hardware advantages, the cooperation company's card position advantage in the smart city field will more effectively promote the rapid development of business. The landing of the applied city can reflect the replicability of the company model. up to now, "traffic brain" has been applied in Hangzhou and pilot promoted in cities in Jiangxi, Fujian, Shanxi, Shaanxi and other provinces; "healthy brain" has been applied in Shenyang regional population health information platform project and gradually promoted and copied in corresponding provinces; "judicial brain" has been effectively applied in Shanghai Judicial big data.
The project quality is stable and the order on hand is abundant.
The company has participated in many major national projects, including 5 of the 10 newly opened high-speed rail lines and the information construction of the Zhuhai port of the Hong Kong-Zhuhai-Macao Bridge project. We believe that the company's continuous participation in national projects not only demonstrates the company's strong undertaking capacity and technical advantages, but also sets a benchmark for future succession. In addition, the company won the bid in 2019 to build a new Lianyungang-Zhenjiang railway information system and related construction projects, winning a total of 148 million yuan, sufficient orders to ensure the company's stable income in the future.
Profit forecast and investment advice
It is estimated that the company's net profit from 2019 to 2021 is 152 million yuan, 192 million yuan, 239 million yuan, corresponding to EPS 0.23,0.29,0.36 yuan, corresponding to PE is 42.7,33.9,27.1 times, the first time to cover the "overweight" rating.
Risk hint: business growth is not as expected; project progress is not as expected.
