Suzhou Keda (603660): Performance is slightly higher than expected Continue to implement the “AI + Big Data” strategy
Event: The company released its 2018 annual report in the evening and achieved operating income of 24.54 ppm, an increase of 34 in ten years.41%; realized net profit3.22 ppm, an 18-year increase.90%; Reduction of fair incentive costs 5,045.After the impact of 400,000 yuan, the company’s net profit was 3.720,000 yuan, an increase of 37 in ten years.53%.It is planned to transfer 4 shares for every 10 shares to all shareholders and pay 1 out.00 yuan (including tax). Opinion: The change in product structure and the increase in the proportion of LED small-pitch products have led to a decline in gross profit margin.The company achieved a gross profit 杭州桑拿 margin of 60 in 2018.38%, a decrease of 5 compared to the same period last year.98 units.Looking further, the gross profit margin of the video conferencing business was 67%, a decrease of 13 percentage points from the same period last year; the gross profit margin of the video surveillance business was 52%, an increase from the same period last year.The main reason for the decline in the gross profit margin of the video conference business was the change in product structure and the increase in the proportion of LED small-pitch products. Operating cash flow declined.The company achieved net operating cash flow of 0 in 2018.200 million, down 75 from the same period last year.55%.The main reason is that the company’s project volume has become larger and the implementation period has become longer. At the same time, the company has paid an additional increase in the purchase of raw materials and expenses, which has resulted in the increase in employee compensation and marketing expenses. Release of convertible bond plans to help long-term development.The company issued a convertible bond preplan, the proposed scale of which does not exceed 5.$ 51.5 billion, invested in projects such as video artificial intelligence industrialization and cloud video industrialization.We believe that the smooth issuance of convertible bonds will help the company’s long-term development. Continue to implement the “AI + Big Data” strategy.As a video application comprehensive service provider, the company revolves around the mission of using video technology to empower industry customers and relies on the “AI + Big Data” strategy to continuously improve from front-end video capture, vertical video storage, video interaction, data presentation to video analysis and synthesisEnd-to-end intelligent products and solutions, such as applications, give full play to the application value of video information and create value for customers.From the perspective of demand, the demand for construction projects such as Xueliang Project, Smart City, Video Government Cloud, etc. is stable, and the company is expected to continue to maintain high growth relying on the promotion of product power. Investment suggestion: The company is a veteran domestic security manufacturer, and has accumulated alternative technologies and a better reputation in the industry.The future outlook is to use the Xueliang Project as the starting point to further seize market share and enter the rapid growth track. The EPS is expected to be 1 in 2019-2020.12.1.46 yuan, maintain Buy-A rating, 6-month target price of 35 yuan. Risk Warning: The video surveillance business progress is lower than expected.