Event: an Jubao released its third quarterly report on October 28, 2016. In the first three quarters of 2016, the company achieved operating income of 532 million yuan, an increase of 4.50% over the same period last year, and a net profit of 13.378 million yuan for shareholders belonging to the parent company, a decrease of 55.16% over the same period last year. Based on the latest share capital, the basic earnings per share is 0.02 yuan.
Comments:
The operating income increased slightly and the management expenses increased significantly. In the first three quarters of 2016, the company's operating revenue increased slightly, mainly due to the year-on-year increase in monitoring and system integration and display sales. The total amount of sales contracts signed by the company is 744 million yuan, an increase of 12.34% compared with the same period last year. The company's home net profit dropped significantly compared with the same period last year, mainly due to the company's current efforts to promote mobile Internet projects and urban cloud parking networking projects, resulting in a continuous increase in sales and management expenses during the reporting period. The year-on-year increases of these two fees were 5.16% and 17.48%, respectively. In the future, with the deepening of the company's business transformation and the gradual maturity of new business, the company's profit level is expected to improve.
With the rapid development of cloud parking, the advertising gate has been put into trial operation. The company continues to rely on the country's numerous marketing service outlets and strong community customer resources advantages for product promotion. In the first three quarters of 2016, the company signed a total of 3129 parking lots, including 2773 advertising gate parking lots, involving a total of 5817 sets of parking equipment, including 5073.5 sets of advertising gate equipment. Compared with the data disclosed in the semi-annual report, the number of contracted parking lots increased by 79.7%, and the number of parking facilities involved increased by 66.4%. At the same time, the function of booking and sharing parking spaces in APP has been put into use, and pilot booking and sharing parking spaces have been carried out with some parking lots in Guangzhou.
Based on the new business form of "Smart Cloud parking + car Internet Gate Advertising", the company also discussed advertising applications and data applications with potential partners. By the end of September, the company's advertising gate has started advertising investment, and took the lead in Guangzhou, Dongguan some areas of the gate advertising trial operation, which laid the foundation for the company's future extension development. In the first half of the year, the company's application for non-public offering of shares was examined and approved by the Securities Regulatory Commission, and the stock offering work is currently being actively promoted. The funds raised this time will be invested in the construction and promotion of the urban cloud parking network system project, and the smooth implementation of the fund-raising project will help the company to achieve strategic upgrading, increase market share, and play a positive role in improving brand value, and further improve the company's core competitiveness and profitability.
Earnings forecast and rating: we expect the company's operating income for 2016-2018 to be 863 million yuan, 992 million yuan and 1.141 billion yuan respectively, and the net profit attributable to the parent company to be 24 million yuan, 47 million yuan and 53 million yuan respectively. The latest share price corresponds to 306,155,139 times of PE. Maintain the "overweight" rating.
Risk factors: the risk that the company's transformation is less than expected; the risk of industry policy adjustment; the risk of a substantial decline in profits as a result of increased investment in new business.