Xinzhi Cognition (603869): Lagging project schedule leads to negative growth in performance
Introduction to this report: The progress of the industry cognitive solutions business project is lagging behind, instead of being completed on schedule, which will drag down the company’s revenue and profit growth.
Investment Highlights: Maintain Overweight 北京桑拿网 rating.
The lag in the progress of industry cognitive business projects has led to pressure on performance growth, and lowered its profit forecast. The EPS for 2019-2021 is 0.
53) / 0.
82) / 0.
The company deeply cultivates intelligent security big data business, and the industry has a lot of room for development. With reference to the industry average, the company’s development strategy is given to 35xPE in 2019, and the target price is reduced to 17.
5 yuan to maintain the overweight level.
Brief description of results: the company’s revenue in the first three quarters of 201917.
5.1 billion / -12.
41%, net profit attributable to mother 1.
5.2 billion / -47.
03%, deducting non-attribution net profit 0.
7.9 billion / -68.
Third quarter company revenue 6.
4.7 billion / -19.
24%, deducting non-attributed net profit of 3.89 million yuan / -97.
In line with expectations.
The project lag leads to a decline in performance, an improvement in the quality of cash flow, and a decline in the expense ratio during the period.
The lag in the progress of industry cognitive solutions business projects has led to negative growth in revenue and profit growth.
In the first three quarters of 2019, the company’s sales receipts, project investment, and bank repayments all increased, the quality of cash flow improved, and the expense ratio during the period was 17.
83pct), where the selling expense ratio is -2.
16pct, overhead cost rate -2.
54 points, +2 financial expense ratio.
88pct, the company increased investment in research and development1.
250,000 yuan, an increase of 77 in ten years.
Promote the full integration of data and business.
The company builds a smart police product system that is driven by data and builds an iSmart smart product system; by providing industry cognitive solutions for customers’ digital transformation and upgrading, digital empowerment is achieved.
The company will make efforts to deploy B-side customers, strengthen the smart enterprise team, integrate resources, and combine the rich business scenarios of the company and its shareholders to create smart enterprise methodologies and related products.
Risk factors: market environment risks, receivables risks, technology research and development risks.