I. Overview of events

The company announced on October 29th that its revenue in the first three quarters was 37.297 billion, up 21.19% from the same period last year, and its net profit was 30.5496 million yuan, an increase of 257.27% over the same period last year. In a single quarter, the company achieved revenue of 14.194 billion yuan in the third quarter, an increase of 30.59% over the same period last year, and a net profit of 17.8819 million yuan, an increase of 1258.25% over the same period last year. The company's performance forecast predicts that the net profit of returning to the mother in the third quarter is 15.33 million yuan to 22.33 million yuan, an increase of 1061.36% Murray 1591.67% over the same period last year. The figures for the three quarters are in line with the forecast.

II. Analysis and judgment

Revenue side: third quarter revenue 14.194 billion year-on-year growth of 30.59%

The company's revenue in the third quarter was 14.194 billion yuan, an increase of 30.59% over the same period last year. From the perspective of split business, the mobile phone industry is still the core driver. From distribution to retail, Tianyin has built an all-channel network in the 3C electronics industry, and the channel expansion of SKU on TO-B and the new SKU on TO-C have greatly contributed to the income scale and growth. At the same time, with the continuous improvement of online and offline integration, Tianyin is gradually building a strong supply chain system. Although the lottery industry accounts for a small proportion of revenue, but the growth rate is stable, as the only Futian lottery double access company in the industry, its domestic business has achieved steady growth. At the same time, Tianyin continues to expand its product line, aiming at the fast-growing international market, IGT, from a technology company to a technology company, and has expanded its business to five overseas countries.

Profit side: home net interest rate of 0.13%, a substantial increase in 940pct over the same period last year, mainly due to the expansion of new business models

The net profit of home ownership has increased significantly, which is expected to be mainly due to the steady expansion of the new business model and the adjustment of product agency structure. Split, the expense rate dropped significantly: the company's gross profit margin in the third quarter was 3.32%, down 12.38 pct from the same period last year; the sales expense rate was 1.43%, down 34.00 pct; the management expense rate was 0.56%, slightly lower than the same period last year; the R & D expense rate was 0.1%, down 42.05 pct from the same period last year; and the financial expense rate was 0.6%, down 37.66pct from the same period last year.

5G is in sight, innovation is expected, and profit is expected to continue to improve.

Taking "one network, one platform" as the axis, the company continues to deepen the industrial development layout of "one network, one platform", through the creation of "offline network, online platform", to establish a new retail system, and strive to grow into a leader in China's industrial Internet. 2019 is the first year of 5G, with the maturity and landing of 5G technology, Tianyin is expected to usher in a 2-3 year shipping growth cycle, mobile phone business is expected to achieve rapid growth. At the same time, the company's development in areas such as e-cigarettes and lotteries, as well as the transformation from a technology company to a technology company, will provide new possibilities and sustained impetus for future development.

III. Investment suggestions

We predict that the return net profit of the company from 2019 to 2020 is 175 million yuan, 298 million yuan and 393 million yuan respectively, the EPS is 0.17,0.29,0.38 yuan respectively, and the corresponding stock price PE is 35X, 20x, 15X. With the maturity and landing of 5G technology, Tianyin is expected to usher in a 2-3 year shipping growth cycle, covering the "cautious recommendation" rating for the first time.

Fourth, risk tips:

Lottery policy risk; mobile phone sales are not as expected; lottery business promotion is not as expected.