Items:
According to the 2018 semi-annual report, the company achieved a total operating income of 549 million yuan in the first half of the year, an increase of 19.31% over the same period last year, a net profit of 74.7075 million yuan, an increase of 62.65%, and a non-return net profit of 52.4255 million yuan, an increase of 28.64% over the same period last year.
Comments:
The performance is growing steadily, and the business performance of net Security and Principal Security is outstanding. In the first half of the year, the company achieved a total operating income of 549 million yuan, an increase of 19.31% over the same period last year, a net profit of 74.7075 million yuan, an increase of 62.65% over the same period last year, and a non-return net profit of 52.4255 million yuan, an increase of 28.64% over the same period last year. The main reason for the rapid growth of the company's revenue and deduction non-net profit is that the company's principal division and its subsidiary Beijing Yahong network security business maintained good growth, of which the network security business increased by 89.36% compared with the same period last year, and the information security business increased by 108.33%.
Attach importance to personnel training and improve the company's long-term incentive mechanism. The first grant and registration of the 2018 restricted stock incentive scheme implemented by the company was successfully completed, with a total of 8.14 million shares granted to the company's core employees, effectively attracting and retaining excellent management talents and business backbones, which will help to further establish the company's human resources advantages.
Committed to becoming the country's leading expert in cyberspace data governance. After years of accumulation and development, the company continues to expand its business in the governance of network violations, the governance of public opinion in cyberspace and the governance of network basic resources big data. (1) in terms of network illegal governance, the company's public security big data intelligent perception platform has been applied to 237 prefectures, cities, districts and counties in 28 provinces; (2) in terms of public opinion governance in cyberspace, the company's national firewall products and public opinion management products have broken through a number of national network security projects in overseas markets and established a good international reputation. (3) in terms of big data's governance of network basic resources, the company has provided integrated Internet information security management solutions for the Communications Administration of 25 provinces, 18 provinces of China United Communications Co., Ltd. And its branches, 19 provinces of China Mobile Limited Communications Group and its branches, 6 provinces of China Telecom Corporation Group and its branches, 14 provinces of China TieTong Group Co., Ltd. and its branches, and more than 1300 IDC/ISP enterprises. It is in the leading position in China in terms of traffic coverage and market share. The company is expected to seize the development opportunity that the country attaches great importance to self-control and network security, and continue to expand the market to become the country's leading expert in cyberspace data governance.
Investment suggestions: the policy continues to increase, the leadership of the CPC Central Committee attaches great importance to it, and there is huge room for network security and information technology to improve in the future. The company pays close attention to the development opportunity of the national network security strategy and "Belt and Road Initiative", focuses on the network security data governance business, actively opens up new markets, and has a good development trend. We estimate that the company's net profit from 2018 to 2020 will be 190 million yuan, 238 million yuan and 287 million yuan respectively, corresponding to 23 times, 18 times and 15 times of PE respectively.
Risk hint: market competition aggravates risks; policy support is not as strong as expected.