SSIC (002912) 2018 Annual Report and 2019 First Quarterly Report Review: The rapid growth of network visualization, network content security, big data and other extended applications are worth looking forward to
Event: On the evening of April 19, 2019, the company released the 2018 annual report and the 2019 first quarter report.
The company achieved total operating income in 20186.
910,000 yuan, an increase of 38 in ten years.
85%; Realize net profit attributable to shareholders of listed companies.
500,000 yuan, an increase of 54 in ten years.
73%; the company’s total operating income in Q1 2019 was 9,741.
740,000 yuan, an increase of 8 in ten years.
21%; net profit attributable to shareholders of listed companies was -621.
470,000 yuan, a decrease of 312 a year.
Investment suggestion: Benefit from the continuous increase of network data traffic, big data analysis and continuous growth of network security requirements and other factors and the company’s good results in product upgrade optimization and sales channel construction, the company’s 2018 performance maintained high growthTo achieve net profit attributable to shareholders of listed companies.
50,000 yuan, an increase of 55% in ten years.
As a leading enterprise in the network visualization industry, the company has a rich product business layout, including broadband network products, mobile network products, network content security products, and big data operation products, covering effective network data extraction, data storage and calculation, data analysis and mining,Data application and display.
The income of broadband network products affected by various favorable factors maintained stable and rapid growth. At the end of 17, the total amount of China Telecom’s supporting engineering projects won the bid.
9.5 billion (unrecognized revenue in 2018) will also increase future achievements; in terms of mobile network products, there will be changes in the short term, and in the long term, benefiting from the continuous increase in penetration and innovative integration with extended application products, the future will remainWill maintain steady growth.
Network content security products and big data operation products have 南宁桑拿 mature hardware and technical advantages. They have been gradually developed internally and have begun to bear fruit, and there is huge room for future growth.
We expect the company to achieve operating income in 2019-2021.
2.1 billion, 15.
5 billion, 21.
2.6 billion, realizing net profit attributable to mothers2.
8 billion, 4.
07 billion, 5.
25 trillion, corresponding to 2 EPS.
62 yuan, 3.
81 yuan, 4.
92 yuan, with reference to the closing price on April 19, 2019, the corresponding PE is 37.
51 times, 25.
79 times, 19.
98 times, maintaining the “highly recommended” level.
Broadband network product revenue has grown steadily and the product structure has been continuously optimized: The company achieved operating income of 69,120 in 2018.
800,000 yuan, an increase of 38 over the same period last year.
85% is mainly due to the continuous increase in data traffic and good results in the construction of sales channels. At the same time, the company’s product upgrade and optimization projects have made progress in stages, and product competitiveness has been further improved, which has satisfied customers’ various business needs.
The company’s business structure has remained stable compared to the same period of the previous year, with big data operations and strong growth in network content security products.
Broadband network products, realized revenue in 20183.
810,000 yuan, an increase of 49 in ten years.
35%, accounting for 51% of revenue from 17 years.
27% to 55.
15%.Mobile network products to achieve revenue 2.
15 ppm, an increase of 15 in ten years.
88%, accounting for 37% of revenue from 17 years.
21% fell to 31.
06%, mainly due to the fluctuation of short-term demand for products.
Big data operation products have made breakthrough progress in industry applications, accumulated rich experience in data governance and knowledge maps, and obtained a certain scale of application in various industries at home and abroad. In 2018, they achieved operating income of 1,737.
30,000 yuan, an increase of 244% in ten years.
Network content security products have further enriched product features, achieving 5,436 in 2018.
40,000 yuan increased by 133% a year.
In addition, the company has also strategically entered the field of industrial Internet security, launched industrial Internet security products and solutions based on existing products and technology platforms, and achieved applications in related industries. It is expected that it will also contribute a certain amount of revenue in the future.
China Telecom’s supporting engineering projects are progressing in an orderly manner, and big data may open up growth space: The company won the bid for China Telecom’s supporting engineering projects at the end of 2017, with a project amount of 4.
95 trillion, as of the end of 2018, no revenue has been recognized yet.
With the orderly progress of the project, it will directly increase the performance in 2019, driving the rapid growth of network visualization product revenue.
In terms of big data operation products, the company has initially recognized the market competitiveness of big data platforms such as the audit all-in-one machine developed by the company and industry big data analysis products. It has achieved a certain scale of application in relevant government fields and has received widespread praise from users.
In response to the needs of the rapid development of big data in the public security industry, the comprehensive information collection and analysis system has been continuously optimized to achieve a wide range of applications across the country.
At the same time, major progress has been made in the application systems of relevant industries, and multiple projects have been successfully deployed, which has won praise from customers and opened up future growth space.
The customer structure was further optimized: from industry, government, and operator, the proportion of revenue contribution was 63% and 36% respectively; from the perspective of the top five customers, the total revenue contribution ratio was 40.
05%, a decrease of nearly 8 average values compared with the same period last year; from the regional average, the proportion of income in Northeast, North China, Southwest, Northwest and other regions has steadily increased.
With the steady progress of telecommunications projects and the continuous contribution of multiple types of customer revenue, the company is expected to continue to maintain a high-speed growth trend in the future in network visualization and extended applications.
Gross profit margin remained high, and research and development continued to remain high: The company’s overall gross profit margin in 2018 was 78.
67%, a decrease of 0 compared to last year.
36 pct, mainly due to the decline in gross profit of broadband network and mobile network products.
The gross profit margin of broadband products was 83.
57%, a decrease of 2 over the same period last year.
89 pct, still maintained a high level in general; mobile network products due to the decline in product demand and increased competition in the industry and other factors, the mobile network gross profit margin fell 7.
61 to 71.
79%, but gradually the products will be upgraded in the future and the overall coverage of the system will be upgraded, and the gross profit margin will rise.
In terms of period expenses, sales expense expenses23.
52%, a slight decrease compared with the same period last year, and basically maintained the same proportion change with the scale of operating income; the management expense ratio was 32.
23% (including R & D expenses), a decrease of 1 from the same period last year.
15 pct; R & D expenses reached 1 in 2018.
670,000 yuan, an increase of 40 over the same period.
66%, mainly due to the rapid growth of R & D personnel, the company’s R & D personnel increased from 446 in 17 to 638, and the growth of R & D personnel is the company’s breakthrough in the development of various products, which is conducive to the further promotion of future products;Cost Expense -3.
77%, a decrease of 3 from the same period last year.
62 pct, mainly due to the increase in interest income in the current period compared with the previous year.
The Q1 error in 2019 is a restructuring fluctuation, and the overall probability of high growth in 2019 is high: in the first quarter, the company achieved revenue of 9,741.
740,000 yuan, an increase of 8 in ten years.
21%; realized net profit attributable to mother -621.
470,000 yuan, a decrease of 312 a year.
57%.The temporary transition of Q1 in 2019 is a restructuring mutation. Revenue and profit contributions are mostly recognized in the second half.
The company’s final revenue mainly comes from broadband network products and mobile network products. The end users are mainly government agencies, telecommunications operators and enterprises.
As customers usually implement a budget management system and a centralized procurement system, the peak demand for the market mainly occurs in the second half of the year.
The company currently has sufficient orders in hand and the industry demand continues to grow steadily. The advance payment amount reached at the end of the first quarter.
56 ppm, which is expected to maintain high growth throughout 2019.
Risk reminder: the risk that the company’s supplementary order situation is less than expected; the risk of the growth rate of the network visualization industry falling short of expectations; the risk of the company’s product gross margin falling; the risk of the company’s new product research and development being less than expected;