Main points of investment:
Medium-term results maintain steady growth
According to the company's interim results report recently, the company's semi-annual operating income was 848.1914 million yuan, an increase of 17.9 percent over the same period last year. The net profit belonging to shareholders of listed companies increased to 22.7719 million yuan from-55.4751 million yuan in the same period last year, achieving a turnaround from losses to profits, an increase of 140.85% over the same period last year.
Increase revenue and cut expenditure to promote the company's main business to turn losses into profits
From the interim results, we can see that the company's revenue growth of 18% is mainly due to the improvement of the optical communications industry in the past year, and the sales of optical fiber products and equipment are booming, not only the output and sales volume of optical fiber and optical cable have increased, but also the unit price has increased slightly. At the same time, the company pays close attention to purchasing and production management, reduces unit consumption, improves the rate of quality products, and increases the overall gross profit margin by 2 percentage points. In addition, in terms of expenses, the company achieved a year-on-year decline in three expenses, mainly optimizing the selection of suppliers, divesting non-core businesses to reduce related labor and other expenses, reducing interest payments and increasing income by raising capital deposits and capital preservation. Based on the above measures to increase revenue and reduce expenditure, the company can turn losses into profits, and is expected to continue this trend in the second half of the year and achieve rapid profit growth throughout the year.
Tapping the core competitiveness and operating in various aspects around the development of operators since 2016, the policy broadband China strategy has promoted operators to speed up the construction of optical fiber networks, and the overall prosperity of the optical communications market has improved steadily. At the same time, with the expansion of the network, the total amount of data transmission has also shown explosive growth, which has also led to a substantial increase in the demand for traffic transmission dominated by optical fiber and optical cables. The above two aspects bring more room for growth to the optical communication industry. In this context, the company takes the optical communications industry as the core, optical fiber production increased by 26% compared with the same period last year, all kinds of optical cable production increased by 14%, and quartz materials and quartz products increased by 14% compared with the same period last year. It better grasps the opportunity of prosperous production and sales in the optical communication market.
At the same time, the company launched the engineering construction of Shandong Xinmao optical fiber preform manufacturing project. after the project is completed and put into production, it will gradually form an annual production capacity of 500 tons of optical fiber preform, and open up the company's whole industry chain of "bars, fibers and cables" in optical communications. further increase the company's gross profit margin and competitiveness. In the first half of the year, the company also added 7 utility model patents, won the third prize of "National Science and Technology Progress" by the Ministry of Industry and Information Technology, and enhanced the company's core competitiveness.
Divest the main business of non-communication and extend the new service of optical communication
On the other hand, the company accelerated the divestiture of part of the non-core assets business and completed the transfer of 70% equity of Tianjin Shengjun Science and Technology Development Co., Ltd. and 100% equity of Tianjin Betvio Science and Technology Development Co., Ltd., reducing the loss of non-main business. In the future, we will continue to spin off the non-core business, concentrate resources on the development of the main business, reduce the overall debt level of the company, and optimize the financial structure.
Under the premise of expanding and strengthening the main business, considering the current opportunity of IP professional operation and development, the company will take the comprehensive operation of IP resources as the starting point and make use of the advantages of the communications industry to extend related industries. Combined with existing cash assets of 1.231 billion yuan, the company launched an additional issuance project to raise funds and invest in the construction of "Special Optical Fiber industrialization Project", "Optical Communication Engineering Technology Research and Development Center Project", "Marketing Management Network Construction Project", "IP Operation platform Project" of IP Comprehensive Operation platform Project, and "big data Precision Marketing platform Project". This layout further improves the added value of the company's products, enhances the scientific research and technological content of the company, and finally realizes the great-leap-forward development of the company's optical communication industry.
Profit and forecast
Take full account of the company's current industry business cycle and the improvement of profit margins brought about by the company's future bright stick project. Regardless of the additional income brought by the additional issuance project, it is estimated that the company's EPS of 0.04,0.11,0.17 yuan in 16-18 will be given a "holding increase" rating.
Risk hint: the progress of the light stick project is lower than expected; the prosperity of the optical fiber industry is declining.