The company maintained rapid growth in the first half of 19, dispelling market concerns about the sustainability of growth. Centering on trusted identity technology, the company has blossomed in finance, social security, public security, overseas and other markets, and has made new breakthroughs in overseas market business development this year. Guangdong-Hong Kong-Macau Greater Bay Area is now facing the development opportunity and continues to strongly recommend it.
Event: the company released its semi-annual report in 2019, with revenue of 315 million yuan in the first half, an increase of 35.47% over the same period last year, a net profit of 47 million yuan, an increase of 35.48% over the same period last year, and a non-net profit of 43 million yuan, an increase of 30.58% over the same period last year. The performance is in the median of the forecast, which is in line with market expectations as a whole.
The application scenario of trusted identity technology is underestimated, and the "release management and service" policy brings continuous increment. Many investors' understanding of the company is mainly limited to identity card + smart card reading, and they are worried about the persistence of the company's high growth driven by public transport aggregate payment in 2018. In the first half of the year, the company's smart transportation business still achieved 16.73% year-on-year growth, and the gross profit margin increased by 4.36 percentage points, maintaining steady growth after opening up new markets. The business of identification and intelligent applications increased by 44.76% in the first half of the year compared with the same period last year, mainly due to the market demand for upgrading and capacity expansion of electronic passport manufacturing and issuing equipment, and intelligent people's livelihood policing solutions. vehicle license, license plate inspection and other self-service products as well as document online management platform, we believe that this is only the beginning of the application of identity technology. In the future, the key information of trusted identity in the Internet of things will face more and more extensive scenario application requirements, such as online and offline identity management interconnection, online trusted identity authentication and other related service requirements.
New breakthroughs in overseas market expansion to meet Guangdong-Hong Kong-Macau Greater Bay Area's development opportunities. The company has always attached importance to the expansion and extension of overseas markets. In the first half of the year, overseas business increased by 262.75% compared with the same period last year, accounting for 22% of the company's revenue. Hong Kong won bids for a number of electronic license management projects, and overseas continued to make breakthroughs. Has been and will continue to be an important engine of performance growth. The new phase of employee restricted stock incentive will be implemented, which will help the company to better grasp the opportunities for the construction and development of Guangdong-Hong Kong-Macau Greater Bay Area, which centers on the Shenzhen first demonstration Zone.
Investment advice: "highly recommended-A" investment rating. The company's traditional license market is facing new business opportunities, the document online management platform extends and penetrates into many industries, and the demand for new scenarios under the Internet of things continues. It is estimated that the company's EPS for 19-21 will be 1.04 EPS 1.42 shock 1.90 yuan, the current price corresponds to PE 25-18-14 times, the "small but beautiful" target with high growth and low valuation, and maintain the "highly recommended-A" rating.
Risk hint: fierce market competition leads to the risk of a decline in gross profit margin; overseas progress is not as expected.