The company's main business is sound, and it has laid out the new business direction of marketing. The company was established in 1994 by Zhejiang Textile Mill, a state-owned unit, and listed on the Shanghai Stock Exchange in 1997. In 2011, due to the restructuring of state-owned enterprises, the original management was transferred to the actual controller of Zhuji Municipal Government, and the shareholding ratio was stable for a long time. After the establishment of the company to textile printing and dyeing as the main business, in 2008 to increase the capital of subsidiaries and table to make steel pipe sales and processing become the second main business, the acquisition of Taiyi in 2016 still cut into the field of Internet marketing, the two denotation expansion have improved the performance. At present, the company develops in a dual-main business model, steadily developing traditional business and constantly expanding Internet marketing boundaries to enhance business flexibility.
Taiyi refers to the deep ploughing of Internet marketing, and its technical ability is expected to upgrade. Taiyi still owns many sub-brands, such as "finger customer", "SNS+", "AdSmart" and "OTV", and forms comprehensive coverage in mobile, PC, OTT and other terminals as well as social media and video platforms. In terms of data, Taiyi also has third-party data resources, including precipitation data, telecommunications, operators, finance and other third-party data resources, and its DMP platform has won the "big data Xinghe Award Outstanding big data Product Award" of the China Institute of Information and Communication. According to the company announcement, in November 2019, the company increased its capital by 30 million and held a stake of 5.77%. The two sides are expected to cooperate in data analysis, consumer insight and other areas to further upgrade the company's technological capabilities.
The newly established digital chain, digital gold, continue to extrapolate the business boundary. In December 2019, the company invested 100 million yuan and 50 million to set up Zhejiang Furun Digital chain Technology Co., Ltd. and Zhejiang Furun Digital Gold Technology Co., Ltd., to expand the blockchain and financial technology business; on December 20, Furun Digital chain joined hands with Thai finger Shang and Guoxintai to launch a trusted computing platform to explore the application of blockchain technology in the field of data privacy and security; in January 2020, Fourun Digital chain joined hands with China Unicom to release disk cards. The company continues to land new business, the business boundary is expected to continue to extrapolate.
The 2019 performance forecast exceeded expectations. 2018 the company achieved revenue of 2.767 billion, an increase of 43.57% over the same period last year, and its net profit was 217 million, an increase of 30.47% over the same period last year.
On January 20, the company announced its 2019 performance forecast, which is expected to achieve a net profit of about 600 million yuan, an increase of about 177% over the same period last year; deducting 180 million of non-net profit, an increase of about 8% over the same period last year, and the performance further exceeded expectations.
Investment advice: the company's traditional business is sound, and its marketing business benefits from the company's active upgrading and iterative efforts to extrapolate the business boundary. We expect the company's 2019-2021 net return to be 600 million, 350 million, 450 million, corresponding to EPS 1.15,0.67,0.86 yuan, with a target price of 16.75 yuan and a "buy-A" rating.
Risk tips: the promotion of digital chain and gold business is lower than expected, and industry competition aggravates the risk.
