This report is read as follows:
The growth rate of revenue and net profit of 2019Q1-3 is lower than we expected. The company's intelligent couplet plate business is gradually taking shape, which will provide new momentum for the company's growth in the era of Wisdom couplet. Maintain the "overweight" rating and maintain the target price of 16 yuan.
Main points of investment:
2019 reported revenue and net profit in the third quarter was lower than we expected, maintaining the "overweight" rating and maintaining the target price of 16 yuan. The company's 2019Q1-3 revenue was 1.647 billion yuan, up 17% from the same period last year, while the net profit from its parent was 168 million yuan, down 6% from the same period last year. The revenue forecasts for 19-21 years are 23.92 (- 1.16lue 5%), 28.55 (- 1.6%) and 34.32 (- 1.88%) respectively, and the net profit forecast for 19-21 years is 3.38 (- 0.39%), 3.99 (- 0.57%) and 4.83 (- 0.67%) respectively. The corresponding EPS in 19-21 years was 0.42 (- 0.05), 0.50 (- 0.07) and 0.61 (- 0.08) respectively. Considering the strong competitiveness of the company in financial technology, it has achieved initial results in the layout of Wisdom business, maintaining the target price of 16 yuan, corresponding to PE32x in 2020, and maintaining the "overweight" rating.
Q3 single-quarter revenue and net profit growth rate slowed down compared with the same period last year. 2019Q3's single-quarter revenue was 581 million yuan, an increase of 10%, while its net profit was 58.82 million yuan, a decrease of 28%. Q3 gross profit margin 35.4%, lower 7.4pct than the same period last year, higher 1.2pct than Q2.
Ownership structure adjustment, financial technology + intelligent couplet business double-round force. Since Ant Financial Services Group joined the stock in 2018, Nanjing State-owned assets mixed Reform Fund and Service Trade Fund have been invested one after another. At present, Shanghai Yunxin, Nanjing State-owned mixed Reform Fund and Service Trade Fund hold 5.05%, 5.02% and 5.02% of the company's shares, respectively, with second, third and fourth shareholders. After the shareholders with technical background and state-owned capital background have bought shares one after another, the company's anti-risk ability and technical strength have been further improved. In addition to the steady progress of the business of financial technology, the company's Wisdom couplet business is gradually taking shape. The company has accumulated core competencies such as edge computing, chip, AI, cloud computing and big data in long-term practice, and has formed a good cooperative relationship with head customers, which will usher in the harvest in the intelligent era.
Catalyst: the company has further upgraded its cooperation with Ant Financial Services Group and made a new breakthrough in Smart things.
Core risk: impairment of goodwill and lower-than-expected market development.