Event: the company recently released its three-quarter report for 2019, with operating income of 474 million yuan in the first three quarters, an increase of 32.74% over the same period last year, and a net profit of 77.63 million yuan belonging to shareholders of listed companies, an increase of 32.02% over the same period last year. In the third quarter, the operating income was 160 million yuan, an increase of 27.66% over the same period last year; the net profit of shareholders belonging to listed companies was 31.1 million yuan, an increase of 27.16% over the same period last year.
Comments:
Q3 deduction non-net profit is high, card innovation business development is smooth.
The net profit of Q3 company after deducting non-return increased by 46.03% compared with the same period last year, changing the declining trend of Q2 net profit growth in a single quarter, indicating that the innovative business of the company's card category is progressing smoothly. As the world's leading integrated identity information service provider, the company is committed to providing industry customers with integrated software and hardware solutions for online and offline identity identification and management applications. In recent years, in addition to the traditional ID card and passport issuance business, the company actively promotes innovative business in the fields of public security, foreign affairs, transportation, overseas documents and elections. Various solutions such as Wisdom people's livelihood Police (entry and exit, Household Administration, Traffic Police) solution, Wisdom Social Security Service Hall solution, Wisdom Bank network self-service acceptance system and other solutions have been launched. Q3 company's sales and management expenses have been properly controlled, and the year-on-year growth rate is relatively low. At the same time, R & D expenditure has increased significantly compared with the same period last year. Follow-up new products and new business launch are expected to be guaranteed, and future performance is expected to continue to maintain steady growth.
Launch a stock incentive plan to stimulate the vitality of employees.
The company issued the 2019 restricted stock incentive plan on July 18, the second quarter of 2019, encouraging 1.67 million shares, accounting for 1.24% of the company's total share capital. The incentive target, including the company's directors, senior managers, middle managers and core backbone employees, has a wide range of awards, and through incentives to mobilize the enthusiasm of employees, it is helpful to lock in the interests of core employees and create greater value for the company.
Technological innovation advantages, all-round development at home and abroad.
The company's identification and intelligent application service business is expected to continue to maintain rapid development, the company with a strong ability of independent research and development and technological innovation, master the core technology of identification, fewer competitors in the same field, obvious advantages in the industry. The company has undertaken a number of benchmarking projects such as the Ministry of Public Security and the Ministry of Foreign Affairs e-passport project. The company's aggregate payment terminals and solutions have covered many major cities across the country, and have cooperated with Alipay, Wechat and UnionPay to promote the penetration of aggregate payments to third-and fourth-tier cities. At the same time, the company also closely follows the "Belt and Road Initiative" strategy to provide identification-related services to a number of countries and regions along the route. Hong Kong's next-generation smart ID card system, Hong Kong and Macao residents' passes to and from the mainland, and the Nigerian election system are all built by the company, and the competitiveness and influence of the international market continue to rise.
Investment suggestion: considering that the company's card position advantage is prominent, the company is expected to achieve a net profit of 1.4,1.8 and 220 million yuan from 2019 to 2021, corresponding to the current market value of 23, 18, 14 times, given a "highly recommended" rating.
Risk tips: the process of strategic development is not as expected; the development of industry customers is not as expected; the progress of technology development is not as expected; and the results of overseas business development are not as expected.