Main points of investment:
Half-yearly report reverses losses and profits
On August 9, the company released a semi-annual report saying that operating income in the first half of this year was 481 million, up 28.28% from the same period last year; net profit attributable to shareholders of listed companies was 1.3993 million, compared with a loss of 44.056 million in the same period last year; and basic earnings per share was 0.002 yuan. As of June 30, 2019, the company's net assets belonging to shareholders of listed companies were 1.038 billion yuan, down 3.2% from the end of last year; the net cash flow generated by operating activities was 74.1892 million yuan, compared with-102 million yuan in the same period last year. The semi-annual report is in line with market expectations as a whole.
Consolidate the traditional power business and provide a full range of software and hardware services
Since the beginning of this year, the international and domestic economic environment has become more severe, technology change and industry adjustment have restricted the development of the company, but the management has made great efforts to adjust the business and product structure, focusing on the power field that the company is good at and insisting on technological innovation. In the first half of the year, the company's communication power supply products made a major breakthrough in overseas markets, and were successfully applied to telecom operators in nearly 50 countries and regions. The sales scale and profits increased significantly compared with the same period last year. On the one hand, it continued to cooperate with Telenor, E.CO, Zong and other equipment manufacturers, and made major breakthroughs in bidding in Pakistan, the Philippines and other places. On the other hand, we actively promote 5G power solutions and make breakthroughs in 5G power sales in South Korea and some EU countries, laying the foundation for the large-scale development of overseas business in the 5G era. Domestically, with the issuance of 5G license, the business demand of communication power supply will be released quickly. The company's 5G base station power supply, micro-station power supply, micro-module and other products have been developed and can be mass-produced at any time. In the field of big data, the company's data center power products won the bid this year, and the high-voltage DC power supply system was recognized by the industry, marking the company's successful return to the data center power market. for the follow-up big data business development to lay a good foundation. In addition, on the basis of communication power supply hardware products, the company has also developed a new generation of intelligent communication infrastructure operation and maintenance platform-Power Cloud, which integrates power environment monitoring and equipment management and maintenance. to achieve real-time monitoring, operation and management functions. Therefore, judging from the operating situation in the first half of the year, the company's business power supply business has shown a trend of breaking the situation, and the subsequent improvement of the prosperity of the communications industry is expected to achieve rapid performance growth.
New energy business has made a major breakthrough, electric vehicles and charging pile business will enter the harvest period
In recent years, relying on years of power technology accumulation, the company has cut into the field of core components of new energy vehicles and formed a complete motor electronic control product system. Especially in the hydrogen fuel vehicle business, the company's fuel cell DCDC converter product power has reached 60-120kW, covering all stack power demand at home and abroad, is the leader of this subdivision industry. At present, the company has established a number of hydrogen fuel vehicle manufacturers to continue cooperation, such as Beijing Yihuatong, Futian Automobile, Shenlong Union, as well as Zhejiang hydrogen Road, Weichai, Edelman and so on. In terms of electric vehicles, the 40kW permanent magnet synchronous add-program system and hybrid excitation add-program system developed by the company can meet the needs of controllability and economy of new energy vehicles in the future. This product has completed sample delivery and is expected to obtain orders from Weichai and other customers. With the current subsidy policy for new energy vehicles tilted to infrastructure construction such as charging (hydrogenation), domestic charging pile construction has ushered in a small peak in a short period of time. On the basis of the original air-cooled charging pile, the company took the lead in developing the liquid-cooled charging pile, which can be widely used in harsh environments such as high salt fog and dust, and became the first in China. Recently, the company's liquid-cooled charging pile has successfully won the bid "Hainan Boao Smart Grid Optical Storage and charging Integration demonstration Project" and will be displayed at the Boao Forum in November. Since the beginning of this year, the company's charging pile sales have increased significantly compared with the same period last year, mainly due to the addition of long-term cooperative customers such as Huarui Quick Chong, Anhui Shengde, Xiexin Ruitong, Zhi Dian Quick Chong, Chengdu Rongyuan, and the follow-up with the popularity of new energy vehicles, the intensive layout of charging piles, the business is expected to bring new performance growth points to the company.
Extensive layout of smart energy business, building intelligent factories to enhance competitiveness
The company has made a multi-faceted layout in the smart energy business, conducted in-depth cooperation with customers such as Petrochina, China Tower Corporation, Aerospace long March and other customers in Xiongan, and established a number of smart energy demonstration projects such as Xiongan intelligent photovoltaic car sheet. at the same time, it also participated in China Tower Corporation Energy Company's "hundred cities, thousands of stations" intelligent change cabinet project. The company's EPS and intelligent evacuation system products are widely used in Daxing International Airport, Beijing Metro, Shenzhen Metro and other rail transit, airports and other public infrastructure fields; the company's power optimizer is being put into the international market, which will not only bring hundreds of millions of yuan of sales to the company in the future, but also further enhance the company's market position in the photovoltaic industry. In terms of manufacturing and supply chain, the company has been building an intelligent factory in Langxi, Anhui Province. the automation of its production line has been greatly improved, and its product manufacturing capacity has been significantly enhanced by combing and optimizing the internal management process of the factory. we will further improve the response speed and product delivery ability of the supply chain, and actively build a manufacturing system and supply chain that meet the requirements of international companies.
Restart the equity incentive plan, showing that the management is optimistic about the future development.
The company implemented an equity incentive scheme in the first half of this year, granting 10.14 million stock options and 6.67 million shares to the company's management and core technical staff. The implementation conditions of equity incentive show a steady growth trend for the company's performance in the next three years, that is, the net profit from 2019 to 2021 is not less than 30 million, 60 million and 100 million yuan. Therefore, the equity incentive plan effectively combines the interests of shareholders, the interests of the company and the personal interests of the core team, and enhances the cohesion of the company. at the same time, the exercise conditions also show that the management of the company is full of confidence in the rapid growth of the company's performance in the next three years.
Performance forecast
Considering that the construction of 5G in the communications industry is expected to accelerate, the demand for basic communication power supply is expected to start quickly, the company's power business will quickly return to the profit level of the peak of 4G construction, and the layout of the new energy business cultivated by the company in recent years has been completed. it is expected to enter an explosive period. The operating situation in the first half of the year also shows that the company's business adjustment since last year has achieved initial results, and the follow-up is expected to further improve the company's performance. We estimate that the company's revenue in 2019-2021 will be 1.319 billion yuan, 1.82 billion yuan and 2.42 billion yuan, corresponding to a net profit of 45.51 million yuan, 112 million yuan and 160 million yuan.
Risk hint: 5G construction is not as expected, the collection of operators is not as expected, and the progress of new energy vehicle business is not as expected.