Epidemic factors + strategic adjustment, 20H1 revenue and profits suppressed
The company's 20H1 realized revenue of 939 million yuan (YoY- 41.82%) and net profit of-56.8455 million yuan (YoY-130.71%). Due to the impact of the epidemic in the first half of this year, the bidding and implementation of some projects have been delayed, resulting in a decline in revenue and profits compared with the same period last year. We believe that the company is actively completing strategic transformation and business strategy adjustment, focusing car networking and public security information two vertical applications, gradually forming the core competitiveness, with the business gradually landing, it is expected to return to growth in the future. We expect the company's EPS to be 0.06,0.11 and 0.19 yuan respectively from 2020 to 2022, maintaining the "overweight" rating.
20Q2 revenue growth rate narrowed, turning losses into profits
Compared with the overall operating situation of 20Q1, the growth rate of 20Q2 operating income is-7.52%, which is significantly smaller than that of-62.30% of Q1, and the net profit is 2.1322 million yuan, which is the first time that the company has turned a loss into a profit since 19Q3. We can see that the company has improved after strategic transformation and adjustment of business strategy. Among them, the business income of police terminals and information services increased by 36.55% in the first half of the year compared with the same period last year, with a relatively significant improvement. We believe that with the gradual easing of the impact of the epidemic at home and abroad, combined with the strengthening of the synergy of various departments of the company, the efficiency of market expansion is expected to return to growth in the second half of the year.
Tamp the core competitiveness and increase the rate of R & D expenditure
The company spent 165 million yuan on 20H1 R & D, and the R & D expenditure rate reached 17.55%. The R & D expenditure rate increased by 5.26% compared with the same period last year. It is mainly used for the research and development of products related to 5G vehicle networking and public security informatization in the two main waterways, so as to build core competitiveness and power car networking V2X and police information energy storage for its follow-up. We believe that the investment in the current stage will help the company to achieve rapid transformation, grasp the first-mover advantages in the early stage of the development of vehicle networking V2X, and realize the transformation from traditional integrators to products and platforms.
The company seizes the highland of intelligent Internet connection self-driving industry.
Vehicle networking is the main starting point for the landing of the national transportation power strategy, one of the main development directions of the new infrastructure, and the vehicle networking industry is expected in the future. At present, the company has formed the whole industry chain layout of vehicle gauge-level communication module, vehicle terminal T-BOX and OBU, roadside terminal RSU, and intelligent transportation platform, the company is developing a vehicle gauge-level 5G+V2X module based on Qualcomm Inc SDX55 Auto (SA515M) platform, which is expected to be the first commercial landing project of 5G C-V2X in the world; at the same time, its solution has successfully landed Guangzhou Biological Island Intelligent Network connection Automobile Project 5G-V2X innovation scheme. With the gradual improvement of the penetration rate of the intelligent network connection automobile industry, the company is expected to form a first-mover advantage and open up the growth space in the future.
The company's business growth is expected to return to growth, maintaining the "overweight" rating.
We continue to be optimistic about the future development of the company, based on the continuous improvement of the prosperity of the automobile intelligent network industry, combined with the company to focus on expanding the car network V2X to open up the growth space. According to the improvement of the current industry boom and the current good progress of market expansion, we have raised the revenue growth rate of the company's car networking and public security information business. It is estimated that the company's EPS for 20-22 years will be 0.06 shock 0.11 shock 0.19 yuan (before adjustment is 0.06 shock 0.10 shock 0.18 yuan). With reference to Wind, it has been predicted that the 21-year average PE valuation of A-share comparable company is 59.5 times, giving the company a 21-year PE valuation of 60 times, corresponding to a target price of 6.89 yuan per share, maintaining the "overweight" rating.
Risk hint: overseas OBD terminal shipments are uncertain, the landing of domestic car networking products is not up to expectations, and public security information bidding may be delayed.