The company released its annual report for 2018, with operating income of 416 million yuan, down 26.94% from the same period last year, and net profit of 18 million yuan, down 80.45% from the same period last year.
The company also released its quarterly report for 2019, with operating income of 329 million yuan, an increase of 151.01% over the same period last year, and net profit of 39 million yuan, an increase of 54.67% over the same period last year. It exceeds the upper limit of 30 million yuan to 35 million yuan for the quarterly results forecast.
With abundant orders on hand, high growth in follow-up performance is expected to be guaranteed. In 2018, the company's on-hand orders were 1.681 billion yuan, an increase of 79% over the same period last year. The company's new orders in 2018 were 1.256 billion yuan, an increase of 75% over the same period last year. Affected by the adjustment of the macro-economy and customers' own business plans, some of the implementation projects of the company in 2018 were less than expected, and the revenue declined compared with the same period last year. The company's overall expenses continued to grow year-on-year in 2018, which led to a decline in profits higher than the decline in revenue. Research and development expenses increased by 39% compared with the same period last year, and further increasing technology investment will help to consolidate the company's competitiveness in the long run.
Downstream application scenarios are diversified, and cross-industry replication capabilities have been verified. Compared with 2017, the company has made breakthroughs in supermarket, petrochemical, automotive, pharmaceutical, logistics and other industries. New growth poles have been excavated outside the tobacco and new energy industries. In 2018, new orders in new industries other than tobacco and new energy accounted for more than 50%. The company's customers in the new industry, China Resources Wanjia, Zhongke Refining and Chemical Industry, FAW Xichai and Guangzhou Pharmaceutical are all well-known customers in the industry, which plays an important role in the continued expansion of the industry. The downstream application scenarios of the company are further diversified, and the cross-industry replication capability has been verified.
Continue to invest in research and development to open up the future growth space of the company. In 2018, the company continued to increase investment in big data, artificial intelligence, industrial Internet and other fields, and the research and development of technologies such as robots and today's intelligent factory cloud platform further expanded the scope of the company's product sales. From "hard" to "soft" to enhance the company's stickiness to customers, in-depth mining the value of industrial data.
Investment advice: the company's cross-industry expansion is carried out in an orderly manner, and the growth path is clear. The research and development of new products such as robots and industrial cloud platforms is conducive to the expansion of the company's product sales scope and the improvement of competitiveness. It is estimated that the EPS from 2019 to 2020 will be 0.51 yuan and 0.69 yuan respectively, maintaining the "buy-A" rating, with a six-month target price of 19.50 yuan.
Risk tips: the landing of cross-industry expansion is not as expected; the demand of the tobacco industry is not as expected; the landing of innovative products is not as expected.