This report is read as follows:
The performance slightly exceeded expectations, the demand for industry-level applications in the domestic cloud video conferencing market continued to rise, and the company's 263 cloud communications products and brands are expected to directly benefit from the improvement of industry prosperity. The business integration of the subsidiary is smooth and the operation is on the right track.
Main points of investment:
Maintain the target price of 7.52 yuan and give it a "overweight" rating. The company forecasts a net profit of RMB 1.63-181 million in 2019, an increase of 90-110% over the same period last year, mainly due to the increase in the fair value of the company's investment in Zhiyuan Interconnection and Capital online. Considering the smooth development of the upstream and international business of the communications industry, we have raised the company's EPS to 0.13 (+ 8.33%) yuan in 2020, keeping the EPS unchanged at 0.16 yuan and 0.19 yuan respectively from 2019 to 2021.
We value the company at 47 times PE in 2020 and maintain the target price of 7.52 yuan.
The company's products and brands are expected to benefit from the upward prosperity of the domestic cloud video industry, and the business integration of subsidiaries is smooth. In the domestic cloud video conference market, the demand for industry-level applications such as education and party building continues to rise, and the company's 263 cloud communication products and brands are widely recognized in the market, and are expected to directly benefit from the improvement of industry prosperity; the company established a joint venture with NTT in Japan to establish Shanghai Naisheng, acquired I-Access, and the business integration of subsidiaries was smooth, and it is expected to further expand overseas markets.
The layout of the individual market is comprehensive, and the overseas Chinese market is a new source of growth. There is a great demand for communication among overseas Chinese, which remains to be developed. After the acquisition of iTalkBB, the company has become the world's largest Chinese and Korean telecom operator; the impact of the reduction in international personal data roaming charges has been gradually digested by the company, and the adjustment of personal overseas data roaming business is in progress. The profit model of overseas Chinese family telephone, television and mobile communications business has been further improved, and the overseas Chinese market is expected to become a new source of performance growth.
Catalyst: the enterprise communications market is growing rapidly; 5G businesses are increasing their demand for video conferencing ahead of time; and Naisheng's overseas communications market is expanding smoothly.
Main risk factors: increasing macroeconomic downward pressure; hindering the expansion of overseas markets.
