The results were in line with expectations and were briefly under pressure in the first quarter: the company's operating income in 2019 was 750 million yuan, an increase of 23.20% over the same period last year; the net profit belonging to shareholders of listed companies was 127 million yuan, an increase of 13.39% over the same period last year; and the net cash flow generated by operating activities was 123 million yuan, an increase of 64.10% over the same period last year.
Overall performance maintained rapid growth in 2019, in line with expectations. The overall performance maintained rapid growth in 2019, mainly due to the continuous development of the domestic industrial automation and information industry, as well as the gradual recovery of upgrading demand in downstream industries, and the company's newly signed contracts increased significantly. The company's gross profit margin for 2019 was 42.54%, slightly lower than the same period last year. At the same time, the company's annual expenses increased slightly compared with the previous quarter, mainly because the company's increased investment in sales and R & D resulted in a 20.32% increase in sales expenses and 17.67% in R & D expenses. Affected by the epidemic, the company achieved operating income of 128 million yuan in the first quarter of 2020, an increase of 3.73% over the same period last year; the net profit attributed to shareholders of listed companies was 11 million yuan, an increase of-6.03% over the same period last year, with short-term performance under pressure; net cash flow from operating activities was-21 million yuan, an increase of-38.79% over the same period last year. The company's gross profit margin in the first quarter of 2020 was 40.49%, which was basically stable compared with the same period last year. At the same time, the company's expense rate during the first quarter increased slightly compared with the previous quarter. The sales expense rate, management expense rate, R & D expense rate and financial expense rate were 11.33%, 7.01%, 12.96% and-0.78% respectively, up by 0.09pct,-0.8pct, 1.37pct and 0.36pct over the same period last year. The increase in expense rate during the period is mainly due to the increase of sales investment and R & D investment led to the increase of sales expense rate and R & D expense rate.
Continue to increase R & D investment and actively promote the landing of new projects: the company continues to deepen the business layout of smart industry, smart energy and smart city, and further defines the 3i strategy of building "three nets". At present, the company has accumulated 141 authorized patents and 175 software copyrights. The company continues to increase investment in R & D in order to maintain the company's technological leadership. In 2019, the company added 15 patents, including 6 invention patents, and the company's R & D expenditure totaled 80.4035 million yuan, an increase of 17.67% over the same period last year, accounting for 10.72% of the operating income. At the same time, the company continued to promote business expansion, with an increase of 24.71% in fixed assets in 2019, mainly through the acquisition of the biomass heating project of Nantong Keyuan Green Energy Co., Ltd. and the roof photovoltaic project of Hefei Changbingjiu Energy Co., Ltd. at present, there are more than 10 intelligent energy investment projects under tracking, which reserve an extensive and high-quality project resource pool for the company's energy Internet investment application. The company's projects under construction increased by 826.09%, mainly due to the increase in the construction progress of the Peixian Zhongji Qingneng and Guozhen Lingbi projects.
The "new infrastructure" promotes the growth of the company, and the winning project highlights the competitive advantage: the industrial Internet, as a key infrastructure for intelligent manufacturing, is also an important part of the "new infrastructure" strongly advocated by the state.
The company's industrial Internet business continues to develop, further consolidate the position of the industry, smart power, smart chemical, intelligent metallurgy and other industry solutions shine brilliantly. Smart Power Board has signed a number of gas turbine power generation control systems, the total performance of the first in China, leading in the world, including waste incineration power generation signed a total of 71 projects, 113 units; in terms of intelligent control system and optimization, undertake a series of intelligent control systems. The Wisdom Chemical sector has successfully won dozens of projects, accumulating valuable experience for complete sets of general contract projects in the chemical industry. at the same time, in the competitor base camp, it has successfully won the bid for Huzhou European and American New material DCS Project, which is the first application of BATCH software independently developed by the company in the chemical industry. The intelligent metallurgical plate has achieved the first breakthrough in the unmanned driving business, and has successfully applied the unmanned driving products from the laboratory to the production site, and has been put into operation; at the same time, it has successfully won the bid for the unmanned transformation project of 5 vehicles in the Yangtze River cold rolling raw material warehouse of Shagang Group, and the company began to lay out the unmanned grab driving business to accumulate experience and technology for carrying out the unmanned driving business in the future.
Investment advice: the company's annual report and quarterly report are in line with expectations, are expected to fully benefit from the new infrastructure, and continue to be optimistic about the company's "three nets" strategy. We predict that the EPS of the company from 2020 to 2022 is 0.68,0.82 and 0.95 yuan respectively, and the corresponding PE is 20.89,17.44and 15.09times respectively. Maintain the "highly recommended" rating.
Risk tips: macroeconomic environment and policy risk; brain drain risk; market competition risk.