Event: the company issued a 2017 performance forecast, which is expected to achieve a net profit of 400 million yuan to 500 million yuan, an increase of 17.62% to 47.02% over the same period last year.
Main points of investment:
It is forecast that the median net profit will increase by 32% compared with the same period last year, reassuring the market. Due to the performance of the bet is not up to expectations, the market is worried about Donglan digital goodwill impairment problem. We believe that although the price assessed by the income method at the time of the acquisition in 2014 is a 375 million premium to the asset-based approach, considering the substantial increase in the two properties owned by Donglan Digital, and Donglan Digital is doing better this year than last year (no impairment was triggered last year), so the possibility of goodwill impairment is lower. In addition, the company's acquisition of Ofeiling, Jingtu Information, Jiedong Control's performance is better, of which Ofeiling and Jingtu Information even exceeded the performance bet last year. As the net profit in 2017 is mainly concentrated in the first three quarters, the growth in the first three quarters of 2016 is less due to a higher base, but the forecast of the 2017 results shows that the company's return net profit is expected to achieve better growth this year, with a median of 450 million to 22 times the previous price of PE, dispelling market concerns about the impairment of the company's goodwill and the slowdown in endogenous growth.
Complete the research and development of self-controllable MCU chip application module, and officially launch in February next year. Prior to this, the company cooperated with Myers and Riskaiwei to invest in MCU chips. In December 2017, the MCU prototype completed the modularization of two application scenarios, LoRa (low power wide area network communication technology) and military BMS (battery management system), and is expected to be released in February 2018. In the future, the chip will carry out modular research and development of successfully developed MCU chips in the fields of big data, intelligent conference and smart city, which will help the batch application and sales of MCU chips.
Employee shareholding and increased holdings of actual controllers show confidence in development. The company completed its employee stock ownership plan in September this year, buying a total of 26.5349 million shares (about 1.85% of the total share capital), with an average transaction price of 8.53 yuan and a lock-up period of one year. At the same time, the company's four controlling shareholders and actual controllers also increased their holdings of 2 million shares by setting up a holding company, demonstrating long-term development confidence and releasing momentum for future performance.
Valuation and investment advice: the company's EPS from 2017 to 2019 is expected to be 0.32,0.42 and 0.54 yuan respectively, and the current share price corresponding to PE is respectively times that of 22-17-14. Big data's business has expanded into finance, online games and other fields, making rapid progress and maintaining a "buy" rating.
Risk hint: big data's business progress is not as expected; the acquired subsidiary is not as expected after the bet expires.