Events:
The company released its 2019 semi-annual report on August 26. The operating income in the first half of 2019 was 356 million yuan, a decrease of 38.19% compared with the same period last year. The net profit returned to the home was 113 million yuan, an increase of 69.61% over the same period last year. The net profit deducted from the same period last year was 1 million yuan, a decrease of 89.94% compared with the same period last year.
Comments:
Trade frictions between China and the United States have continued, and competition in digital marketing has intensified. The operating income of each business of the company declined. In the smart hardware section, the revenue from LED lighting products was 152 million yuan, accounting for 42.61%, down 27.78% from the same period last year; the revenue from smart hardware manufacturing products was 48 million yuan, accounting for 13.58%, down 57.86% from the same period last year; and in the smart marketing section, the revenue from smart marketing services was 144 million yuan, accounting for 40.45%, down 38.40% from the same period last year. The continuous trade friction between China and the United States has led to a decline in the revenue of smart hardware manufacturing business compared with the same period last year; the intensification of competition in the digital marketing industry and the adjustment of customer budget structure have led to a decline in the volume of smart marketing services. The company's net profit increased significantly, mainly due to the investment of Maimai Technology and Liudu people and the completion of a new round of financing, increasing the company's net profit by 91.9252 million yuan.
The management efficiency is improved, and the effect of fee control is obvious. Among the related fees, sales expenses were 15 million yuan, down 16.74% from the same period last year; management expenses were 30 million yuan, down 22.00% from the same period last year; financial expenses were-0.49 million yuan, up 95.87% from the same period last year; and R & D investment was 13 million yuan, down 6.97% from the same period last year. The company has brought about a decrease in sales expenses and management expenses due to improving management efficiency, optimizing staff structure and reducing the salary expenses of corresponding managers and employees; in addition, financial management income has been included in investment income in the reporting period, while financial income was included in financial expenses in the same period last year, so financial expenses increased.
During the period of business growth, there is great potential for performance growth. With the gradual breaking of the technical bottleneck restricting the development of intelligent hardware and the rapid development of the intelligent hardware industry, the company has cut into the Yihua stock supply chain, which is expected to bring new development opportunities to the company's intelligent hardware plate and promote further growth.
Investment rating and suggestion: we are optimistic about the development potential of the company in the field of smart hardware. It is estimated that the company's EPS in 2019-2021 will be 0.21 EPS 0.24max 0.27 yuan respectively, corresponding to PE times that of 33-29-25, maintaining a "buy" rating.
Risk tips: intensified competition in the industry, goodwill impairment risk.
