Hengwei Technology (603496) Company’s 2018 Annual Report Comments: The logic of network visualized performance growth is clear and continued to be optimistic about domestic embedded
Event: The company released the 2018 annual report on the evening of April 17, and the company achieved operating income4.
310,000 yuan, an increase of 38 over the same period last year.
18%, achieving net profit attributable to shareholders of listed companies.
5.0 billion, an increase of 39.
78%; net profit attributable to shareholders of listed companies was 9,657.
620,000 yuan, an increase of 39.
Investment suggestion: As the industry’s leading supplier of network visualization infrastructure, the company has already cooperated with expansion integrators, and its business scale ranks first in the industry, contributing to the company’s current revenue and profits.
In the future, network visualization will continue to benefit from the rapid growth of the industry brought by the upgrading of mobile communications, the upgrade of big data and information security, and the explosion of video and image data.
In addition, the company continues to increase its R & D expansion in the direction of embedded domestic independent controllable products. The product has gradually been recognized by many important customers. With the development wave of the Internet of Things, Industrial Internet, and intelligent manufacturing, it is expected that it will gradually step into power and energy., Government, enterprises and other key sectors of the national economy and people’s livelihood, cut into the scale market, future growth is expected.
We expect the company to achieve operating income in 2019-2021.
8.9 billion, 7.
5.8 billion, 10.
40,000 yuan, achieving net profit attributable 北京桑拿洗浴保健 to mother 1.
4.9 billion, 1.
9.7 billion, 2.
62 trillion, corresponding to EPS are 0.
80 yuan, 1.
07 yuan, 1.
42 yuan, corresponding to PE is 41 times, 31 times and 23 times.
Considering the company’s advantages in the field of network visualization and the growth space of embedded domestically-controlled independent controllable products, we are optimistic about the potential of the company’s future performance explosion and continue to maintain the “strong recommendation” rating.
Network visualization has benefited from the development of the industry, and revenue has maintained high growth: As a leading domestic network visualization infrastructure provider, the company’s core competitiveness and technological innovation capabilities have been recognized by the market and customers.
Driven by the continuous growth of Internet traffic and the continuous development of downstream applications of network visualization such as information security and big data operations, the network visualization industry has maintained a good development trend in 2018.
The company’s network visualization infrastructure business growth in 2018 is also very significant, and the report actually achieved revenue3.
62 ppm, an increase of 56 in ten years.
42%, accounting for 84% of total revenue from 74% in 2017; gross profit margin of 59.
08%, affected by factors such as product structure adjustment, decreased by 1 compared with the same period last year.
63 pct, but still remained close to 60% overall.
In addition, embedded and converged computing platform product revenue was 6,851.
320,000 yuan, down 15 every year.
08%, gross profit margin increased by 4.
53 pct to 41.
By 2018, the overall gross profit margin has reached 56.
20%, a slight decrease due to changes in the structure of products sold during the same period, but an increase of 2 compared with the first half of this year.
In terms of period expenses, the overall level remained stable, and sales expenses expenses3.
38%, a slight increase from the same period of the previous period, and basically maintained the same proportion change with the scale of operating income; the management expense ratio reached 29.40% (including R & D expenses), an increase of 2.
56 hundred points, mainly due to the share payment provided by the employee compensation stock incentive plan; of which, the 2018 R & D expenses reached 7,718.
100,000 yuan, an increase of 38 compared with the same period last year.
54%; financial expense budget -0.
64%, mainly due to the increase in interest income during the period.
The company implemented an employee stock incentive plan in May 2018, reporting and confirming share payment 1,341.
If it replaces the impact of the share payment expenses accrued, the company’s net profit attributable to shareholders of the listed company is 1.
09 million yuan, an increase of 56 in ten years.
94%, exceeding the revenue growth rate of nearly 20 units, and the profitability increased significantly.
Controlling domestically-controlled, autonomous and controllable probabilities opens up new growth space for 5G: With the advancement of network visualization front-end acquisition equipment for broadband backbone networks, the upgrade and expansion of 4G mobile networks, and the large-scale deployment of future commercial 5G networks, domestic network infrastructure continuesDevelopment and development, the company continues to intensify the speed of research and development expansion in domestic and independently controlled directions, is expected to enter the scale market, and future growth is expected.
In addition, with the development wave of the Internet of Things, the Industrial Internet, and intelligent manufacturing, the domestically controlled and autonomous process will gradually accelerate, and will gradually step into the key industries of national economy and people’s livelihood such as electricity, energy, government and enterprises. The company is expected to gain first-mover advantage and occupy the domestic market.Taking the lead has become a major increase in future performance.
Risk reminder: the risk that the company’s increase of orders is less than expected; the risk of the company’s autonomous and controllable area layout developing less than expected; the risk of the network visualization industry’s slower-than-expected growth; the risk of the company’s product gross margin falling.