Items:
The company issued a forecast of third-quarter results on October 11: it is expected to achieve an attributable net profit of 77 million yuan to 79 million yuan in the first three quarters of 2019, an increase of 30.94% Mui 34.34% over the same period last year. Among them, the attributable net profit in the third quarter was 30.6 million yuan to 32.6 million yuan, an increase of 25.10% and 32.28% over the same period last year.
Comments:
Continue the rapid growth, the business is advancing steadily. It is estimated that the attributable net profit in the first three quarters is 77 million yuan to 79 million yuan, an increase of 30.94%, 34.34% over the same period last year, and the performance is in line with expectations. It is expected that the business of identification and intelligence will continue to grow rapidly, and continue to make steady progress in vertical segments such as public security, foreign affairs, social security, finance, etc., and the domestic market for e-passports will continue to maintain an absolute leading edge, and the international market will be further expanded. It is expected that the comprehensive self-service products of household administration will continue to be promoted in many provinces, and the space will be further opened. It is expected that the intelligent transportation business will achieve steady growth, the functions of the solution will be more integrated, and the potential market involved in the business will be broader. In terms of overseas business, new breakthroughs were made in the project reserve in the first half of the year, intelligent identification was piloted in Hong Kong, the United States, Malaysia and other countries and regions, and multiple personalized anti-counterfeiting technologies are competitive in the world.
Yu Qiang, a strong e-passport, has coordinated efforts in many fields, and the space continues to open. Focusing on trusted identity technology, the company has upgraded from smart device manufacturers to identity information integrated service providers, and many areas are in a period of rapid growth. 1) E-passport products have reached the international advanced level, leading the domestic market share, short-term benefit upgrade to replace the release of demand, in the long run, technology update and penetration will continue to open room for growth; 2) Passport management platform is an important extension of this field, but also the development trend of the industry, has expanded a number of important customers, from the trial period to the rapid growth period, will further strengthen the company's profitability 3) the demand for trusted identity technology other than e-passport is more diverse, and the company has expanded in many fields based on technology accumulation and business understanding, and continues to deepen in the field of integrated identity information management. Participants as the core link of the electronic identity era are expected to fully benefit. 4) overseas business benefits more diversified products and customers, entering a new stage of rapid growth, the company, as a domestic leader, will become a more important global market participant, with the further improvement of overseas marketing network, the growth space is expected to continue to open.
Equity incentive binds the interests of employees to help better release performance. The company launched equity incentives in the second quarter, including directors, senior managers, middle managers and core backbone staff, which is expected to achieve a sufficient incentive effect and further stimulate the vitality of employees. We believe that the proposed equity incentive at that time is to inject new momentum on the basis of good momentum. On the one hand, it helps to stabilize employees, stimulate vitality, strengthen the existing advantages, and help the business to expand better; on the other hand, it also shows that the management of the company continues to be optimistic about the medium-and long-term development, and the follow-up performance is worth looking forward to.
Investment suggestion: we maintain the company's projected net profit of 141 million yuan, 186 million yuan and 239 million yuan from 2019 to 2021, corresponding to 27 times, 21 times and 16 times of PE. Maintain the target price of 39.08 yuan per share and maintain the "push" rating.
Risk hint: the relevant policies are not up to expectations, and changes in the international situation affect overseas business.