Events:
On October 27, 2020, the company released the third-quarter report of 2020. During the reporting period, the company realized revenue of 522 million yuan (- 0.62%), net profit of 53.7852 million yuan (- 33.03%) and non-return net profit of 49.3791 million yuan (- 38.43%). Of this total, revenue in the third quarter reached 155 million yuan, down 26.77 percent from the same period last year, up 4.03 percent from the previous quarter, and deducting 16.0703 million yuan from non-home net profit, down 34.44 percent from the same period last year, an increase of 352.15 percent.
Comments:
1. Q3 business situation gradually picked up in a single quarter, profitability and profitability improved significantly: the progress of construction in the early part of this year slowed down during the epidemic, as the domestic epidemic was gradually brought under control, the state vigorously promoted the construction of new infrastructure in the iconic areas of 5G, big data Center and Industrial Internet, as well as the key support for "two new and one heavy", and the pace of urban road construction transformation and upgrading was accelerated. With the steady growth of intelligent lighting market demand, the company's project undertaking, implementation, delivery, acceptance and other related work progress has been greatly improved. In the first three quarters of 2020, the company achieved revenue of 522 million yuan, down 0.62% from the same period last year, and net profit of 537.852 billion yuan, down 33.03% from the same period last year. 2020Q3 achieved revenue of 155 million yuan in a single quarter, down 26.77 percent from the same period last year, up 4.03 percent from the previous year, and net profit of 197.949 billion yuan, down 34.16 percent from the same period last year, with an increase of 367.69 percent. Although the company's revenue and net profit decreased compared with the same period last year, it grew faster than the previous year, accelerated recovery in the third quarter, and rebounded sharply compared with the same period last year. Smart lamp pole can mount 5G small micro base station, which is not only the best supplementary resource of 5G site, but also the data entrance of smart city. With the acceleration of the construction of the smart city, the company's performance expectations are high.
The reasonable range of the company's period expense rate fluctuates: in the first three quarters of 2020, the company's period expense rate was 10.46%, down 0.19% from the same period last year, mainly due to the decline in management expense rate and sales expense rate, which were 5.33% and 4.56% respectively, down 0.82% and 0.86% from the same period last year.
In the single quarter of 2020Q3, the company's period expense rate was 13.20%, up 3.78% from the same period last year, and 2.90% from the previous year, mainly due to the increase in the company's sales expense rate, management expense rate and financial expense rate, which were 5.79%, 6.15% and 1.25% respectively, up 1.89%, 1.40% and 0.49% from the same period last year, and 1.25%, 0.71% and 0.94% from the previous year. The preliminary project has been gradually carried out, and the company's single-quarter gross profit margin and net profit margin have been effectively improved:
In the first three quarters of 2020, the gross profit margin was 28.13%, down 9.48% from the same period last year; the net profit rate was 10.36%, down 4.91% from the same period last year, mainly affected by the low gross profit and net profit of the Greenway system integration project in the second quarter. With the gradual progress of the company's related projects, 2020Q3's single-quarter gross profit margin and net profit margin increased to 34.02% and 12.73% respectively, down 1.37% and 1.43% from the same period last year, and increased by 10.31% and 9.89% compared with the previous year.
two。 New shareholders continued to increase their holdings in the second quarter. In July 2020, the company conducted an annual equity distribution in 2019, with July 7, 2020 as the equity registration date, A-share cash dividend of 0.13 yuan per share, 0.4 shares per share, so the total share capital was changed to 142.89 million shares. According to the semi-annual report, the shareholding ratio of the top 10 shareholders is 60.95%; at the end of the third quarter, the shareholding ratio of the top 10 shareholders was 58.45%. Among them, Beijing Tianlian Xingjian Technology Co., Ltd. was a major new shareholder in the second quarter, and continued to increase its holdings in the third quarter, increasing its holdings by 2.8578 million shares, increasing its shareholding ratio to 4%, making it the fourth largest shareholder of the company.
3. Under the pressure of the epidemic, we still invest heavily in R & D to promote in-depth development and product innovation: the company increased R & D investment during the reporting period, with R & D expenditure of 20.7789 million yuan, an increase of 35.91% over the same period last year; and the R & D expenditure rate was 3.98%, up 1.07% from the same period last year. In 2020, the company has made some achievements in intelligent parking system, including operation management platform, operation and maintenance management platform, client Mini Program and PDA parking management software. The company and the University of Electronic Science and Technology jointly developed the new scene application of intelligent street lamp, focusing on artificial intelligence, image recognition, machine vision, AIOT and other technical fields, and developed and completed urban intelligent parking system, intelligent city management image recognition system and other products, which have been successfully applied in a number of smart street lamp projects, and the added value and scientific and technological content of the products have been further improved. The company's core competitiveness in the field of smart lamp pole operation continues to be maintained. Thanks to the continuous expansion of R & D investment, the company's product line continues to enrich to meet the personalized needs of different customers.
4. Profit forecast and investment advice:
We estimate that the company's revenue in 2020-2022 will be 9461,694 million yuan, and its net profit will be 1.07 million yuan, 3.57 million yuan, and 2.50 yuan for eps, and 8.69 times for pe, respectively. Due to the impact of the epidemic, the company's orders and performance recovery rate is slow, but considering the company's future performance growth space is high, downgrade and give the company a "recommended" rating.
5. Risk tips: the impact of COVID-19 's epidemic situation; the progress of the smart street lamp project is not as expected; the company's market share is not up to expectations.
