The 19-year performance was lower than expected, which was due to the optimization of the business structure of the company and the growth of profitability in exchange for downward revenue. 5G network construction speed up, the Internet of things accelerated landing, the company is expected to use the national vein-style "industry-university-research" structure to achieve speed-up overtaking of the industry track.
Lower the target price to 9.9 yuan, maintaining the "overweight" rating. The company's 19-year performance was lower than expected, with an annual income of 524 million yuan (- 46.71%) and a net profit of 105 million yuan (- 19.02%). The company disposed of non-strategic core business and low gross margin business, which effectively improved the company's profitability and significantly increased its gross profit margin. Considering the company's disposal of low-profit business, the company's EPS in 19-21 was reduced to 0.10 yuan (- 71.43%), 0.22 yuan (- 50.00%) and 0.32 yuan (- 43.86%). Taking into account the acceleration of 5G network construction, the company directly benefited, giving the company 45 times PE in 2020, but due to the reduction of the performance base, the target price was lowered to 9.9 yuan (- 29.18%) to maintain the "overweight" rating.
The business structure has been significantly optimized, and light travel has welcomed the tide of 5G + Internet of things construction. In order to fully prepare for the wave of 5G + Internet of things construction, the company optimized its business structure and dealt with non-core, low-profit businesses. Its revenue narrowed by 46.71%, and its performance was lower than expected, but its gross profit margin rose from 37.48% to 55.25%, and its profitability improved significantly. The company further focuses on 5G network planning and construction and the Internet of things business plate, opening up the whole life cycle of 5G, exchanging short-term labor pains for long-term accelerated growth.
The construction of 5G network has been accelerated, and the national vein-style "industry-university-research" framework has helped the company to speed up and overtake. The Ministry of Industry and Information Technology will further promote the construction of 5G network and deepen the development of 5G industry-level applications. Cross-industry business development capability and R & D capability will be the key to break the industry situation. The "industry-university-research" structure of the company's "Guomai Technology + Fuzhou Institute of Technology" provides the company with the double guarantee of "front-end business personnel + back-end scientific research capability". With the rich talent pool to break through the industry barriers, and with the profound scientific research background to create a business collaborative closed loop with the Internet of things as the core, to help the company to achieve speed-up overtaking of the industry track.
Catalyst: 5G network construction speed up, Internet of things accelerated landing risk hint: 5G construction is not as expected, Internet of things landing is not as expected