Shuangchuang Electronics (600990) 2019 Third Quarterly Report Review: Compression of non-core business results in performance breakthroughs in the fourth quarter after concentrated delivery, expected results are still expected

Shuangchuang Electronics (600990) 2019 Third Quarterly Report Review: Compression of non-core business results in performance breakthroughs in the fourth quarter after concentrated delivery, expected results are still expected

The company achieved revenue of 15 in the first three quarters of 2019.

1.5 billion (-26.

27%), realizing net profit attributable to mothers-72.37 million yuan; revenue in the third quarter was 5.

1.7 billion, a decrease of 41 a year.

31%, realized net profit attributable to mothers-24.84 million yuan, a year-on-year decrease of 176.

89%.

Affected by the continuous reduction of non-profit projects, the company’s Q3 performance improved, but due to the significant deviation in the company’s product delivery, if the product is normally delivered in the fourth quarter, the performance can still be expected.

Taking into account the impact of business adjustments on the company’s performance, we lowered our EPS forecast for 2019/20/21 to 1.

33/1.

61/2.

02 yuan.

We are optimistic about the development prospects of the company’s radar and security business, especially the platform layout of CLP’s micro asset integration. We maintain a “Buy” rating with a target price of 57 yuan.

Non-profit projects continued to be compressed, and the company’s Q3 performance increased.

The company achieved revenue in the third quarter of 20195.

1.7 billion, a decrease of 41 a year.

31%; net profit attributable to mothers was 24.84 million yuan, a decrease of 176 per year.

89%, exceeding 31.54 million yuan after deducting non-compliance, an increase of 36 from the previous third quarter of 18 years (a decrease of 8.47 million yuan).

7%.

The company’s performance in the third quarter achieved a semi-annual revenue growth rate of -14 in the first three quarters from the semi-annual report.

98% was further doped to -26.

27%, up to 15.

1.5 billion; net profit attributable to mother was -72.37 million, compared with -472 million in the same period last year.

Revenue-side analysis. As the subsidiary Bowei Changan reduced the business scale lacking core competitiveness, and the revenue scale of the headquarters’ smart industry decreased compared with the same period of the previous year, resulting in a decrease in the company’s third-quarter revenue; profit-side analysis, the company in 2019 The company continued to compress non-core businesses in 2015, so the gross profit margin in the third quarter increased by 7 compared with the same period last year.

33% to 15.

66%, but the expense ratio reached 20 during the period.

94%, an increase of 10% compared with the same period of last year. At the same time, because the subsidiary company Bowei Changan disposed of land in the old district in the third quarter of 2018 achieved asset income of 56.76 million yuan, this year it has decreased, further reducing the company’s performance.

The products are focused on 杭州桑拿网 delivery in the fourth quarter, and the expected results are still expected.

There was a clear reorganization of the company’s product delivery, so its performance was more concentrated than in the fourth quarter.

The company’s radar electronics business reported increased investment in product production and smart industry business engineering construction, and revenue has not been confirmed, resulting in a 50% increase in the company’s inventory at the end of the period.

26% reached 18.

430,000 yuan, an increase of 16 over the same period last year.

At the same time, the company’s radar and ancillary services received advance payments from customers, and the advance payments at the end of the period increased by 52 compared to the beginning of the period.

94% reached 3.

730,000 yuan, basically unchanged from the same period last year.

Inventories and advance receipts indicate that the company’s products are still expected to be delivered smoothly in the fourth quarter, and the performance is still expected.

In addition, Bowei Changan, a wholly-owned subsidiary in the first half of the year, replaced 29.04 million yuan, and its 2019 performance commitment was to realize the deduction of non-net profit1.

If the scale of non-recurring items in the first half of the year exceeds the company’s commitment to continue to grow performance, the second half of the year is expected to contribute more than one net profit to the company.

600 million, supporting the expected performance after deductions remain stable. The listing platform is clear, and high-quality assets injection can be expected.

Based on eight, sixteen, thirty-eight, and forty-three China Electronics Technology Group Corporation, the China Electronics Technology Group Corporation established the CPIC Bo Weizi Group. In 2017, the four institutes achieved a net profit of 9 in total.

US $ 4.9 billion, which was 4 times the company’s net profit for the year.

7 times.

On September 38, 2019, the transfer of the company’s shares held by it to CLP Bowei for free was approved by Denko Group.

The company merged as a listing platform for the operation and operation of CLP Bowei. The restructuring of scientific research institutes and the mixed reform of the group will be steadily promoted in the future. The high-quality assets of CLP Bowei will be injected into listed companies, which will increase the performance and enhance the company’s core competitiveness.

Risk factors: The radar business recovered less than expected, and the capital securitization progress was less than expected.

Investment suggestion: Considering the impact of business adjustments on the company’s performance, we lower our 2019/20/21 earnings per share forecast to 1.

33/1.

61/2.

02 yuan (the original forecast was 1.

81/2.

16/2.

59 yuan).

The current price is 47.

24 yuan, corresponding to 36/29/23 times PE for 2019/20/21.

Taking into account the development prospects of the company’s radar and security business, and its deployment as a platform for the integration of CLP’s micro assets in the future, we maintain a “Buy” rating with a target price of 57 yuan (corresponding to 43 times PE valuation in 2019).