March 21

Dahua Shares (002236) 2019 Interim Report Express News Review: Significant improvements in internal reforms continue to improve performance

Dahua Shares (002236) 2019 Interim Report Express News Review: Significant improvements in internal reforms continue to improve performance

Core point of view H1 company’s revenue in 2019 is 108.

07 billion, ten years +10.

11%, achieving net profit of return to mother 12.

39 trillion, ten years +14.

51%, of which 64 in the second quarter.

59 trillion, ten years +4.

23%, net profit attributable to mother 9.

23 ppm, +17 a year.

31%, showing a seasonal 北京spa会所 improvement trend.

We have long been optimistic that the intelligentization of the video security field will lead to heavy industrial upgrades, and we will pay attention to the improvement of the company’s profitability and the acceleration of overseas market expansion brought by the new reforms, and maintain a “Buy” rating.

  2019H1 performance average +14.

5%, close to the upper limit of performance indicators.

The company’s revenue in 2019H1 was 108.

07 billion, ten years +10.

11%, achieving net profit of return to mother 12.

39 trillion, ten years +14.

51%, close to the upper limit of performance indicators.

In terms of a single quarter, the company achieved revenue of 64 in Q2 2019.

59 trillion, ten years +4.

23%, net profit attributable to mother 9.

23 ppm, +17 a year.

31%. The growth rate of Q2 revenue was partly due to the high revenue base caused by the strategic contraction of the company’s restructuring in the same period last year. The growth rate of Q2 net profit was far better than the growth rate of revenue, and partly benefited from the company’s internal management reform and preferential income policies.
We estimate that the company’s income tax rate for 2019H1 is about 9% -10%. Once it is significantly reduced, it comes from the tax shield effect brought by preferential policies such as the addition of research and development expenses.

  It is expected that the company’s performance will continue to improve in the second half of the year, and the expected growth rate is expected to reach 25%?
30%.

Industry scale, domestic commercial demand shifts to corporate efficiency improvement, driving ASP of single projects to increase significantly, and is expected to grow faster than the domestic market as a whole; we estimate that domestic government security projects ‘bidding amounts in the first half of the year were -7% / + 1%The government-side demand is gradually improving; the channel-to-customer demand for AI upgrades is expected to maintain steady growth; there is still uncertainty in overseas markets, but emerging market demand is gradually released and it is expected to maintain a steady growth rate.

At the company level, the company has gradually adopted a contraction strategy since the start of H2 in 2018, laying a good foundation for the company’s H2 growth in 2019; we have noticed that the company won the bid for Q2 2019 in Jinhua City (6 billion) and Gaochun District (1

500 million) and other large security projects, considering the initial characteristics of costs, we are optimistic about the company’s overall performance in the second half of the year.

Overall, through the gradual recovery of the external environment + internal expense control, we expect the company’s second-half performance to continue to improve, and the gradual performance growth rate is expected to reach 25%?
30%.

  It is planned to increase the capital of Dahua Robot by 80 million yuan to accelerate the expansion of industrial automation business.

The company issued an announcement that it plans to increase the capital of Dahua Robots by 40.8 million yuan (a total increase of 80 million yuan).

Dahua Robotics is a newly established innovative business subsidiary of the company in 2018, focusing on the three major business scenarios of AGV handling, industry inspection, and security patrol. We believe that the company’s move is mainly to increase the industrial automation field.

At present, the application of industrial automation and big data analysis in the commercial market is progressing rapidly. The company has expanded its investment in the field of robotics (mainly AGV), is committed to improving the overall competitiveness of industrial solutions, and is able to better grasp this round of business.Dividend from the expansion of the end market.

  Long-term optimistic about the stable development brought about by the company’s internal reforms.

Since taking office in 2017, the reform is still ongoing. Overseas will promote the gradually integrated management and actively participate in large projects around the national “Belt and Road” strategy. In 2019, it will successfully secure safe city projects in Dubai, Mexico, the Czech Republic and other countries.The business is divided into four major segments: 2G + 2B + SMB + 2C, which improves operating efficiency. At the same time, the company mainly promotes the HOC architecture to provide customized solutions for existing customers.

We expect the company reform to continue, and we are optimistic about the company’s steady development brought about by internal reforms.

  Risk factors: Government demand is lower than expected; AI exceeds expectations ahead of time; exchange rate change risks; internal reforms of the company are lower than expected, overseas market development is blocked, and supply of key components is blocked.
  Investment suggestion: The new leader reform will bring about improvement of the company’s profitability and acceleration of overseas market expansion.

We maintain the company’s EPS forecast for 2019-2021.
08/1.

37/1.

73 yuan, giving a 20x PE estimate for 2019, corresponding to a target price of 21.

60 yuan, maintain “Buy” rating.



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Posted 03/21/2020 by admin in category "桑拿