Hudian Corporation (002463) Interim Review: The company’s excellent performance in the second quarter results in the optimization of the product structure of the communications business far exceeds expectations

The event company released its 2019 interim report, which achieved operating income in the middle of 201931.

22 trillion, an increase of 26 every year.

72%; realized gross profit 9.

12 ppm, an increase of 71 in ten years.

75%; net profit attributable to parent company4.

7.8 billion, an annual increase of 143.

40%.

The company believes that the revenue growth rate of the company’s communications sector exceeded market expectations, but the gross profit margin was the main result of an outstanding performance that exceeded expectations.
From April to June 2019, the company realized total operating income.

590,000 yuan, an increase of 35 in ten years.

86%; gross profit 5.

5.9 billion, 72 per year.

53% growth, with 71% growth in gross profit in the first quarter.

36%, the growth rate increased by 1.

17 units; net profit attributable to mother 3.

16 ppm, an increase of 150 in ten years.

02%.

The company’s overall operating revenue growth in the second quarter exceeded expectations. We judge that the revenue growth of the automotive and industrial control segments is limited. In 2018, the two segments accounted for about 27% of the total revenue. Therefore, we expect that the revenue growth of the communications segment will exceed the overall revenue growth rate.The speed may be close to 40%.

In the first half of 2019, the proportion of 5G business revenue in the revenue of the communications sector was still low. The high growth of the communications sector was mainly due to the higher-than-expected growth in digital communications revenue. The product structure was optimized.Manufacturers supply in bulk.

Although the company’s 5G products are growing rapidly, since the 5G construction is still in the initial stage, the reported combined company’s 5G products’ proportion of revenue is still relatively speaking.

The high growth rate of the communications sector in the second quarter was mainly due to the much higher-than-expected revenue growth of the digital communications business and better product structure.

The company has excellent customer relations and sufficient capacity flexibility. The landing of 5G infrastructure investment will bring sufficient flexibility to the company’s future performance. The company will fully prepare for 5G network construction, integrate the production and management resources of Qingye Plant and Huangshi No. 1 Plant, and increase research and development and technology.The speed of transformation and upgrading, and the targeted modest expansion of production capacity 厦门夜网 to increase the production capacity of high-end products; on the basis of ensuring that market demand in other communication application areas does not offset, and effectively increase production flexibility to ensure that the needs of 5G customers are met.

Earnings forecast According to the information in the interim report, we have raised our earnings forecast. It is expected that the company will achieve an operating income of 70 in 2019-2021.

69, 88.

65 and 108.

3.7 billion, net profit attributable to parent company.

33, 14.

70 and 18.

07 trillion, total share capital 17.

2.5 billion shares, corresponding to EPS0.

66, 0.

85 and 1.

05 yuan.

August 28, 2019, sustainable 19.

47 yuan, corresponding to a market value of 33.6 billion.

The PE of 2019-2021 is about 30, 23 and 19 times, and the latest PB is 7.

65 times.

In the next 3-5 years, the company’s product structure adjustment process will continue. The company has gained comparative advantages in the 5G and new energy automotive industries, and its performance flexibility and space are expected.
Risk warning: construction progress exceeds expectations, revenue growth exceeds expectations, gross margin recovery is lower than expected.