Review of recent developments at Jicheng Electronics (002339)

財達證券 ·  05/17/2019  · Researches

The contract volume and return amount of electric power automation business reached an all-time high. The newly signed contract value of the company in 2018 is 1.72 billion yuan. From the perspective of product structure, benefiting from the continuous promotion of urban and rural distribution automation planning and construction and the market opportunities brought about by the integration of intelligent primary and secondary switches, the contract value of distribution terminal products and distribution network integrated switches increased significantly, reaching 720 million yuan in 2018, while substation automation and power consumption information collection products increased slightly.

In addition, the company's distribution network master station products successfully won the bid for Linfen, Changzhi, Yuncheng a number of municipal projects. In terms of new energy business, the company's wind power centralized control system based on big data structure has been officially launched in Henan Datang Power Generation Group, innovating wind power management model, and leading domestic business indicators. Speed up the layout of intelligent charging business, smoothly implement the charging facility project of Xiamen Airport in Fujian, undertake the EPC project of charging stations in Guiyang and Longli, Guizhou Province, win the bid for annual frame project of Changan car charging pile, put into operation successfully, and the comprehensive intelligent charging solution of the company has further won market recognition.

The automation business of public utilities has developed steadily. The water quality monitoring and early warning platform project undertaken by Qingdao Jicheng and the newly listed all-electronic ultrasonic and wireless Internet of things water meters are highly recognized by industry experts; the research and development of ultrasonic intelligent instruments and international cooperation are progressing smoothly and, in cooperation with AMS, the global leader in ultrasonic metering sensors, a new generation of all-electronic intelligent water meters and gas meters are launched to expand the international market.

The share buyback shows confidence. The company announced on March 18, 2019 that it intends to use its own funds to buy back the company's shares for equity incentives or employee stock ownership plans, with a total repurchase fund of 4000-60 million yuan and a repurchase price of no more than 10 yuan per share.

Profit forecast: we forecast that the EPS of the company from 2019 to 2021 will be 0.22,0.26,0.30 yuan respectively, corresponding to the PE of 37.1,30.8 and 27.2 times respectively.

Risk tips: 1) the proportion of accounts receivable is high; 2) overseas expansion is not as expected.

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