The company has entered a period of rapid growth, operating income and net profit will usher in a breakthrough of 100 million. In the first three quarters of 2019, the company achieved an operating income of 988.9964 million yuan, an increase of 20.01% over the same period last year; an operating profit of 115.9391 million yuan, down 2.59% from the same period last year; and a total profit of 115.5661 million yuan, down 2.58% from the same period last year. The net profit attributed to the owner of the parent company was 10349.92 yuan, down 5.31% from the same period last year. The company's 2019 performance forecast provides for goodwill impairment of 540-70 million yuan, and the company is expected to lose 478-621 million yuan, which should be mainly caused by the impairment of goodwill generated by the acquisition of happy people's information, and will not affect the normal operation of the company. The company's artificial intelligence orders reached about 1 billion in 2019, and most of them should be reflected in 2020 according to the normal operation of the contract. The net interest rate is 30%. The newly signed order of Smart City in 2019 is 2.377 billion yuan. It is estimated that about 1.5 billion of the orders will be executed, and the net profit is estimated to be 150 million. The game revenue is estimated to be about 200 million, with a net profit of 57% and a net profit of about 100 million.
The three major businesses of artificial intelligence, smart city and games develop in coordination. In the field of artificial intelligence, the company has the leading domestic UAV research and development and back-end image and video analysis and processing team, forming a full-platform, multi-model "race eagle" product series, and a number of technological achievements have become the first in China to fill the technology gap in our country. The company's robot products have advanced technical support and independent bottom algorithm control assistance, occupy a favorable position in the market. The field of biometric recognition continues to expand. Based on the advantages of wide range of application and fast landing of face recognition, the company's face recognition system and terminal products have been widely used.
With the combination of extension and endogenesis, the R & D team can look forward to the future. The R & D members of the company are mainly composed of experts from other domestic companies, experts from Hefei Institute of Chinese Science and Technology, and high-end talents from overseas (United States and Australia).
The company cooperates with Osaka University, Waseda University and UBC top universities, and strategically cooperates with Tencent and Huawei to establish three research institutes: smart City Research Institute, big data Research Institute and artificial Intelligence Research Institute.
Company profit forecast and investment rating: we expect that the company's net profit from 2019 to 2021 will be-4.95max, respectively, and the corresponding EPS will be-0.63, 0.47 and 0.65, respectively, and the current share price will correspond to a PE value of-12-16-12 from 2019 to 2021. Give a "highly recommended" rating.
Risk hint: the risk of intensified market competition in the future; the risk of market expansion is not as expected.