This report is read as follows:
The company's mobile maintenance project has won the lead in the industry, and the leading advantage is highlighted, which is the target of the first echelon of 5G acceleration.
At the same time, consumer finance drives the demand for financial services outsourcing business up, the two factors are superimposed, and the company's performance can rebound.
Main points of investment:
Maintain the "overweight" rating and maintain the target price of 17.93 yuan. The subsidiary won the bid for six provincial maintenance projects and contributed 923 million yuan in revenue after discount. Taking 2018 as a reference, revenue accounts for 30.46%, which is expected to significantly boost the company's performance in 2020. Taking into account the impairment of goodwill and the decline in gross profit margin of SMS business, the company's EPS in 2019-2021 was-1.44 (- 336.07) yuan, 0.46 (- 37.84) yuan and 0.53 (- 39.77) yuan. Considering that the company has obvious leading advantages in the operation and maintenance industry, significantly benefiting from the acceleration of 5G construction, a certain valuation premium is given to 39 times PE in 2020, maintaining the target price of 17.93 yuan and maintaining the "overweight" rating.
The operation and maintenance business has entered a new round of capacity expansion cycle, and its leading position has clearly benefited. 5G commercial business is getting better and better, and the operator maintenance business is back to the growth cycle. In the bidding of the 9 provincial maintenance project of China Mobile, there are a total of 6 provinces in which the subsidiary Changshi Communications has won the bid. among all the winning units, the number of winning provinces and the overall contract purchase amount are ranked first, and the leading position of the operation and maintenance industry is prominent. We believe that with the acceleration of 5G construction, telecom and Unicom operation and maintenance demand has rebounded with high certainty. As a leading enterprise in the operation and maintenance industry, Changshi Communications is the first echelon beneficiary company.
Enterprise short message business is under pressure and is optimistic about the growth potential of financial services outsourcing business. Affected by the macroeconomic and operator policy adjustments and other factors, the gross profit level of the subsidiary Chuangshi Mandao business has declined significantly. At present, the company is looking for a new way out of multimedia short message service, and is expected to make an effective breakthrough. Consumer finance and other emerging financial industries are growing rapidly, driving the demand for financial services outsourcing. Jiahua Information, a subsidiary of Jiahua Information, occupies a leading position in the industry, relying on rich customer resources, performance is expected to be high growth.
Catalyst: 5G commercial acceleration; financial outsourcing service market is developing rapidly.
Risk hint: the competition in the enterprise short message market is intensified; 5G construction is not as expected.