Event: the company disclosed its semi-annual report on August 25 that the company realized operating income of 170 million yuan in the first half of 2020, down 10.30% from the same period last year, and realized net profit of 11.5454 million yuan, an increase of 52.81% over the same period last year. Gross profit margin 50.41% (+ 6.63pcts), net profit 5.09% (+ 0.98pcts).
Main points of investment:
In the first half of 2020, ROE was 1.23%, an increase of 0.42pcts over the same period last year and a rebound from the end of 2019. During the period of the company, the expenditure increased by 8.86% compared with the same period last year, of which the R & D expenditure increased by 39.89%, mainly due to the increase in R & D expenditure in the reporting period; the management cost showed a decreasing trend year by year, and the overall business condition was good. The net operating cash flow of the company in the reporting period was-98.2582 million yuan, a decrease of 97.38% over the same period last year, mainly due to the increase in various taxes and fees over the same period last year.
The company's main products and business include three major sectors: high-performance integrated circuits, Beidou satellite navigation business and video image security surveillance. Each business segment maintains stable development and development: high-performance integration business includes components and design service products. During the reporting period, the company focused on breaking through technological innovation. The business achieved revenue of 68 million yuan (- 0.88%), accounting for 39.86% of revenue. Among them, components and module products (revenue 50 million yuan, + 22.74%) The gross profit margin is 62.20% and the company is actively promoting the production and delivery of products. Due to the impact of the epidemic, the contract processing schedule of the design service and the external acceptance of the project have been delayed, resulting in a 35.36% drop in revenue (gross profit margin 21.46% 690 pcts).
In the field of Beidou satellite navigation business, the operating income reached 61 million yuan (+ 6.97%) during the reporting period, accounting for 36.08% of the total revenue. Among them, the revenue of Beidou satellite navigation and positioning terminal products reached 60 million yuan, an increase of 23.98% over the same period last year, and the gross profit margin was 58.88% (- 3.71pcts). The growth of performance benefited from the growth of orders in the industry, as well as the company's active efforts to promote the production and delivery of products. The revenue of Beidou operating service products reached 1.5721 million yuan, down 82.82% from the same period last year, and the gross profit margin was 59.82% (+ 4.66pcts), mainly due to the reduction of current orders and the decline in user usage. During the reporting period, the company upgraded the "ground disaster Monitoring platform 2.0" focusing on land disasters, transportation, emergency management, precision cities in high precision, fire line emergency and other aspects to strengthen research and development.
In the field of video image security monitoring business, operating income reached 41 million yuan (- 25.44%) during the reporting period, accounting for 23.87% of revenue, and gross profit margin was 35.5%, an increase of 8.34% over the same period last year. During the reporting period, the company focused on the development of avionics, airport dispatching, intelligent AI identification, police supervision and control and other aspects of innovation and upgrading.
The company disclosed the notice on receipt of transaction notice on August 24 and received a transaction notice from a unit about the purchase of Beidou related equipment, with a total amount of 184 million yuan, and the contract was not formally signed. If the project can be implemented smoothly, it will have a positive impact on the company's follow-up business performance, and at the same time, it will help the company to further expand the market share of Beidou products and reflect the technical and market advantages of Beidou products. It is beneficial for the company to expand the application market of Beidou. We believe that with the launch of the Beidou 3 navigation application, the market size of many Beidou related products will further expand, and the company is expected to usher in a "highlight" moment in the future.
Investment suggestion
Based on the above point of view, we estimate that the company's operating income from 2020 to 2022 will be 503 million yuan, 565 million yuan and 676 million yuan respectively, and the net profit will be 16 million yuan, 23 million yuan and 29 million yuan respectively, and the EPS will be 0.03,0.04 yuan and 0.05yuan respectively.
Risk Tips:
Business development is not as expected,
The process of solving the equity problem is not as expected.