Event: in September, the company issued a pre-plan for the non-public offering of shares. The total amount of funds to be raised for the non-public offering will not exceed 459 million yuan, and the number of shares issued shall not exceed 66.66 million shares. In August, the company released its mid-2020 report that revenue reached 505 million yuan, up 41.77% from the same period last year; net profit from home was 43 million yuan, down 61.65% from the same period last year; and 30 million yuan was deducted from non-return net profit, a sharp increase of 2062.07% over the same period last year.
Comments:
1. The volume of business such as smart hardware is growing rapidly, and the fundamentals have improved significantly as scheduled.
In a single quarter, 20Q1 revenue grew 31.88% year-on-year and Q2 grew 49.82% year-on-year, the second consecutive quarter of rapid growth. The company adheres to the two-wheel drive strategy of "intelligent hardware + smart marketing" and steadily promotes the layout and structural adjustment of each business sector. the operation of the two major business sectors has achieved rapid growth, and the fundamentals have been greatly improved as scheduled.
From the perspective of 20H1 products, the revenue of intelligent terminal products is 228 million yuan (YoY + 50.44%, accounting for 45.21% of revenue), the revenue of smart hardware manufacturing is 61 million yuan (YoY + 25.6%, revenue accounts for 12.04%), and the revenue of smart marketing services is 201 million yuan (YoY 39.38%, revenue is 39.77%). All major product sectors have achieved good growth.
From the perspective of gross profit margin, 20H1's comprehensive gross profit margin is 19.71% (YoY-0.9pp), of which the gross profit margin of smart terminal products is 25.07% (YoY + 0.76pp), that of smart hardware manufacturing is 20.35% (YoY + 6.57pp), and that of command and marketing services is 10.45% (YoY-8.44pp).
From the cost-side point of view, the company increased its R & D investment in smart hardware in the first half of the year, with a R & D expense rate of 3.11% (YoY- 0.57pp), a management expense rate of 4.7% (YoY- 3.85pp), a sales expense rate of 2.97% (YoY-1.34pp), and a financial expense rate of-0.31% (YoY- 0.17pp). On the whole, the company improved its management efficiency while revenue grew rapidly. The expense rate has decreased.
2. To maintain the advantages of smart hardware while extending intelligent terminal products, "strategic upgrade + fund-raising plus code" is worth looking forward to.
The company is firmly committed to the "intelligent hardware + smart marketing" two-wheel drive strategy as the core to build the core competence.
The traditional customers of the company's intelligent hardware business mainly include Philips and ENSEO, etc., and a large number of high-quality customers have been added in recent years: in 2014-2015, it successfully cut into the ABL supply chain system, the largest lighting supplier in North America; and in 2015-2016, it entered the ASM PT China Manufacturing Center, the world's largest semiconductor and light-emitting diode industry integration and packaging equipment supplier. In 2017, cut into the global general lighting field to serve professional customers and end users of one of the leading suppliers of LEDVANCE;2018-2019, cut into the domestic financial technology field leader-Yihua shares, as well as Europe and the United States and even the world's largest home lighting company-EGLO;2019 year, the company's early contact with Panasonic, SSG and so on began to ship in bulk. The company continues to maintain the advantage of smart hardware plate.
At the same time, under the background of the popularization of 5G network to promote the upgrading and reform of the intelligent hardware industry, facing the industry opportunities with broad prospects for the development of the intelligent hardware industry, the company has increased the code layout of intelligent terminal products. The company released the "2020 non-public offering stock plan" this year, and the total amount of funds raised in this non-public offering does not exceed 459 million yuan. It is mainly invested in three aspects: 1) artificial intelligence wearable equipment production base construction project; 2) artificial intelligence wearable master chip and application technology research and development project; 3) supplementary liquidity. At present, the non-public offering is in the acceptance stage of the CSRC, and it is expected that with the smooth progress of the issue, it is expected to speed up the company's strategic extension of the layout of smart hardware business, and build a long-term competitive advantage in the field of smart hardware.
Profit forecast and investment advice: the company continues to firmly develop the "smart hardware + smart marketing" two-wheel drive strategy, while continuously improving the company's internal governance. At present, the smart hardware plate continues to develop well, while the company seizes the opportunity of the new technology wave brought by 5G to further increase investment in smart terminal business for products such as TWS headphones and smartwatches. The company's fair value change income and investment income declined this year, and our forecast net profit for 20-21 years was adjusted from 1.50 and 230 million yuan to 1.03 yuan and 137 million yuan, maintaining the overweight rating.
Risk tips: concentrated customer structure, affected by a single customer fluctuation; exchange fluctuation risk and foreign trade policy change risk; new product promotion does not reach the expected wind direction
