Event: the company recently released its 2016 annual report, the company achieved operating income of 574.3808 million yuan, an increase of 14.81% over the same period last year, and realized a net profit of 17.9353 million yuan belonging to shareholders of listed companies, an increase of 106.91% over the same period last year.
Core point of view: the transfer of 70% equity in Lehui World, isolating the unpredictable loss business, focusing on the main business, expanding innovative business, is good for the company's business. The company's three main businesses, computer peripherals provide the company with major revenue and cash cow, and provide financial support for the other two innovative businesses (industrial business automation and small intelligent drones). Due to the large investment in innovation business, the absolute value of the company's net profit is not high. With the large-scale development of new business, the company's business structure will be more reasonable, and the growth potential will be fully released.
The growth of traditional peripherals business is steady: the company grasps the overall layout of game peripherals and personalized peripherals, focuses on middle and high-end products, and is very competitive in the market. In a report released by the Internet consumption Research Center in 2016, the company's keyboard products accounted for 19.2% of brand attention, three of the top 10 most popular brands, 13.5% of the mouse market, and two of the top 10 most popular mice, fully demonstrating the company's competitiveness.
With the upgrading of consumption and the external demand of competitive games, the internal and external equipment industry will maintain steady growth in the short and medium term. With the trend of centralization of the industry, the company is expected to occupy a larger market share in the industry.
The emerging business sector is growing rapidly: made in China 2025 issued by the government puts forward the goal of speeding up the transformation and upgrading of the manufacturing industry and striving to transform our country from a big manufacturing country to a manufacturing power by 2025. The company focuses on the 3C industry and uses years of manufacturing experience to provide its own mature solutions as an independent business. During the reporting period, the company's robot integration project revenue of 38.1 million yuan, a year-on-year growth rate of 221.95%, has become the fastest growing part of the company's business.
With the help of the company's rich technology accumulation and broad market space, the business is expected to continue to grow rapidly in the future.
Investment suggestion: we expect the company's EPS in 2017 and 2018 to be 0.16 yuan and 1.22 yuan respectively. Based on the above judgment, the "overweight" rating is given.
Risk tip: the development of the drone industry is not as expected, and the growth of the small intelligent robot industry is slowing down.