[event] on the evening of August 7, 2017, the company released its results for the first half of 2017. During the reporting period, the company achieved operating income of 483 million yuan, a slight decrease of 0.79% over the same period last year, and net profit of 32.1891 million yuan, an increase of 11.33% over the same period last year.
With the steady development of information business, both new construction and operation and maintenance pay attention to improving the profit level of the company: the company mainly focuses on highway and port shipping information business, and actively expands into other information fields such as urban intelligent transportation and intelligent security. While focusing on the new information business, actively build a localization operation and maintenance team, firmly consolidate the market share in the field of operation and maintenance, and improve the profitability of enterprises. During the reporting period, the gross profit margin of the company's system integration, technical services and product sales increased significantly, maintaining the sustained growth of the company's profits.
"Internet +" new business continues to develop, creating a new engine of the company's business growth: the company integrates platform, data, users and other superior resources, actively expand "Internet +" transportation business, and explore new business models. In the highway field, the company takes the "Xingyunxia" platform as the carrier to build the ETC application ecosystem; in the port field, the company continues to enhance the service capabilities of a series of SaaS platforms, such as Chinese port network, navigator EDI, ship tracking system, container tracking, etc., to build big data's technical support system, and upgrade the business model in the port and shipping field.
Actively implement the extension layout and expand the company's business area: the company plans to acquire 100% stake in Chengdu Saiying Technology Co., Ltd. by means of non-public offering. Saiying Technology is a domestic first-class military electronics enterprise with a variety of microwave components, satellite tracking, airport security, microwave landing and special instruments. If this acquisition is implemented smoothly, the company is expected to cut into the field of military electronics with good development prospects, produce good business synergy through resource integration, and open up profit space.
Investment suggestion: we predict that the company's EPS from 2017 to 2019 will be 0.25,0.27 and 0.31 yuan respectively. The 6-month target price is 15.50 yuan, which is rated as-A for the increase of holdings.
Risk tips: 1, the industry competition aggravates the risk; 2, the promotion of new business is not up to expectations; 3, the company's extension acquisition is not up to expectations.