Main points of investment:
Events. On October 31, FiberHome released its three-quarter report that the company's income in the first three quarters was 15.8 billion yuan (- 10.97% compared with the same period last year), the net profit returned to the mother was 277 million yuan (- 55.22% compared with the same period last year), and the non-return net profit was 249 million yuan (- 58.32% compared with the same period last year). Gross margin 20.59% (year-on-year-1.34PCT).
The operation improved quarter by quarter. Affected by the epidemic, the company's Q1 performance dropped significantly. In the first three quarters, the company's revenue grew by-40.38%,-8.10% and 10.29% respectively; net profit from home increased by-214.12%,-5.76% and 15.61% respectively; and gross profit margins were 22.71%, 18.82% and 21.42%, respectively. The overall operation of the company shows a trend of improvement quarter by quarter.
Inventory has gone up and costs have fallen. By the end of Q3, the company's inventory was 12.4 billion yuan (10.6 billion yuan at the end of 1919 Q3), and the contract liability was 3.8 billion yuan (2.8 billion yuan in advance at the end of 1919 Q3). In the first three quarters, the company's sales expenses were 1 billion yuan (year-on-year-10%), management expenses 200 million yuan (year-on-year-12%), research and development expenses 1.8 billion yuan (year-on-year-7%), financial expenses 200 million yuan (year-on-year + 42%).
The strategic position of 5G investment is prominent, and the demand of the industry is booming. According to a report on the official account of Wechat, a communications industry website, at a recent press conference on the development of the industrial communications industry held by the State Information Office in the first three quarters, Wen Ku, spokesman for the Ministry of Industry and Information Technology and director of the Department of Information and Communications Development, said, "the development of 5G as a whole is very important, not only for the Ministry of Industry and Information Technology, nor just for China, but actually from various news media, the world also holds a positive attitude towards 5G development. In the next three years, China's 5G is still in the stage of continuous rise, and we still need to maintain strategic concentration, respect the laws of technological evolution, network construction and market development, solidly promote 5G network construction, and comprehensively accelerate the pace of innovation in 5G applications. we will strive to form a 5G benign development model of "promoting use by construction and promoting construction by use". "
Profit forecast. Based on the fact that the company is located in Wuhan and is greatly affected by the epidemic, we have moderately lowered the company's 20-year profit forecast. It is estimated that the return net profit of the company from 2020 to 2022 is 602 million yuan, 1.14 billion yuan and 1.358 billion yuan, and the corresponding EPS is 0.51,0.97 and 1.16 yuan respectively. Considering the strong demand for information security in the industry and the approaching large-scale investment of 5G, the comprehensive benefit of the company is obvious, and the dynamic PE in 2021 is given 30-35 times, corresponding to a reasonable value range of 29.10 yuan to 33.95 yuan, which is "better than the market".
Rating.
Risk hint. ICT business development is lower than expected, the impact of escalating trade friction between China and the United States.