Main points of investment
Event: in the first half of 2019, the operating income of 263 realized 510.08 million yuan, an increase of 20.94% over the same period last year. The net profit of the company in the first half of 2019 was 64.22 million yuan, an increase of 60.23% over the same period last year.
Operating income increased steadily and profit growth maintained upward: due to the increase in Internet data center (IDC) business income and the consolidation of all the results of 263Global Communications in the reporting period, the company's operating income increased by 20.94% in the first half of 2019 compared with the same period last year. In the first half of 2019, the gross profit margin of 263 sales was 54.65%, a decrease of 5.47 PC compared with the same period last year, mainly due to the decline in the gross profit margin of the company's business; the net sales margin was 12.46%, an increase of 4.43 PC over the same period last year. The net cash flow generated by 2019H1's operating activities was 57.68 million yuan, an increase of 225.90% over the same period last year.
The three fees changed slightly, and the domestic and North American markets went hand in hand: 2019H1 263 realized an operating income of 258.26 million yuan in the domestic market, accounting for 50.63% of the company's operating income, and 251.82 million yuan in foreign markets, accounting for 49.37% of the company's operating income. The sales cost of 2019H1 263 was 87.74 million yuan, an increase of 1.64% over the same period last year; the company's administrative expenses (including R & D expenses) were 135.95 million yuan, down 0.85% from the same period last year; and the company's financial expenses were-6.21 million yuan, an increase of 22.63% over the same period last year.
Video layout has achieved initial results, actively building international communications business: 263 video conference products continue to layout the education market, the creation of live online schools, dual-division classroom products have achieved initial results. Companies adhering to the "Belt and Road Initiative", "going out" and other national strategies to actively layout and build international communications business.
Through strategic cooperation with NTT in the field of international communications business, the company makes full use of NTT's brand influence, high-quality customer resources and global marketing ability to complete the construction of IDC+VPN networking products and solutions, and enlarge the company's own business scale.
Profit forecast and investment rating: we expect the company's EPS from 2019 to 2021 to be 0.12,0.16,0.20 yuan, and the current share price corresponding to PE is 45x35pm 28X, maintaining a "buy" rating.
Risk tips: the easing of Sino-US trade frictions is lower than expected, the progress of video technology research and development is not as expected, and the risk of core customer loss.