Hytera (002583): Performance meets expectations Expansion brings new opportunities for development
Event: The company released the semi-annual report for 2019 on the evening of August 25, and the company realized operating income of 27.
0.6 billion, down 11 every year.
42%; net profit attributable to shareholders of the listed company was 2170.
570,000 yuan, an increase of 176 every year.
03%; Net profit of alternative non-recurring gains and losses attributable to shareholders of listed companies-9199.
660,000 yuan, an annual decrease of 1206.
81%; The company achieved EPS 0 in the first half of 2019.
01 yuan, performance in line with expectations.
Comments: 1. The overseas subsidiaries’ business continued to integrate, and net profits achieved rapid growth. According to the company’s semi-annual performance forecast, the forecasted net profit range was 20 million to 30 million yuan, an increase of 154.
50%, with a median of 25 million yuan, an annual increase of 217.
In the first half of 2019, the company’s operating income and net profit were 27.
06 ppm and 2170.
570,000 yuan, down 11 a year.
42% and up 176.
03%, performance is in line with expectations.
Among them, the second quarter’s single quarter operating income and net profit were 16 respectively.
1.4 billion and 1.
2.2 billion, down 11 each year.
9% and up 8.
The decline in company revenue was mainly due to: 1) the carry-over of revenue in the first half of last year was approximately 3.
500 million (at home and abroad), leading to a cardinal number break.
Excluding carry-over factors, the company’s revenue increased slightly in the first half of the year (about 1.
0%); 2) due to the macroeconomic impact in the first half of the year, domestic business pressure has decreased; 3) OEM revenue has fallen sharply.
Net profit increased significantly in the first half of the year, and operating cash flow continued to improve, mainly due to: 1) the steady development of global private network business and continuous deepening of integration with overseas subsidiaries; large project orders announced in the first half of the year reached the highest level in history; 2)The contribution of new wide-narrow integration products to the overall revenue has steadily increased; 3) The effect of refined operations has been significant, and sales and management costs have decreased significantly, and financial management and control have been significantly enhanced.
In terms of products, the main business (private network communications) in the first half of 2019 achieved revenue19.
68 ppm, a decrease of 7 per year.
Among them, terminal product income11.
69 ppm, a decrease of 8 per year.
27%; system product income 7.
9.9 billion, down 6 every year.
16%; excluding the influence of settlement factors, the main business income in the first half of the year increased by about 12 each year.
2019H1 Revenue from OEM and Other Products7.
3.8 billion, down 20 every year.56%, mainly due to the overall sluggishness of the blockchain in the first half of the year, we expect that excluding the blockchain chain, the revenue of the OEM and other product segments will still maintain steady growth.
By region, in the first half of 2019, the company’s domestic and foreign markets respectively achieved operating income10.
98 ppm and 16.
08 billion yuan, down 23 each year.
35% and 0.
87%, accounting for 40% of operating income.
58% and 59.
Compared with the same period of last year, the proportion of domestic business revenue has decreased by 6.
32 units, overseas business achieved good expansion.
Excluding the carry-over effect, the company’s overseas revenue increased by approximately 11.
1%, domestic income fell by about 10.
The company’s overseas expansion was smooth in the first half of the year, and the announcement of large project orders reached the best level in history.
However, part of the announced orders came from the Americas region. Currently, revenue has not been confirmed, which is expected to bring revenue growth in the second half of the year.
From the perspective of subsidiary net profit, the German HMF subsidiary contributed net profit in the first half of 201911.
120,000 yuan, an annual increase of 100.
Cypro’s first-half revenue was dazzling and its net profit reached 1015.
200,000 yuan, net profit contributed nearly half.
The company continues to promote the gradual development of the improved marketing system and digital marketing, and continues to grasp the potential of the “Belt and Road” market.
Further solidify the real public safety field in the European market.
At the same time, the Latin American region has given full play to the synergy effect, and overseas revenue is expected to maintain a high growth in the second half of the year.
2. Measures to increase efficiency and control fees were gradually realized, and the company’s gross profit margin remained stable. In the first half of 2019, the company’s comprehensive gross profit margin.
2%, 0 per year.
Gross domestic sales margin 37.
4%, down by 1 every year.
2 units; gross profit margin for foreign sales is 47.
2%, down by 1 every year.
The gross profit margin of domestic and overseas sales has remained basically stable, with slight deviations.
In terms of gross profit margins by product, the gross profit margins of the company’s systems and OEM and other products in the first half of 2019 were 52.
2% and 19.
9%, up 2 every year.
7 and 0.
1 average, the gross margin of the end product is 51.
8%, a decline of 5 per year.
There are two main reasons for the decline in gross profit margin: 1) the revenue carried over in the first half of last year was mainly high-margin terminal products; 2) the proportion of overseas revenue increased in the first half of this year.Interest rate constant.
In terms of expenses, sales expenses have fallen by 13 each year.
4%, selling expenses 15.
9%, a decline of 0 per year.
4 units; management costs decrease by 4 each year.
29%, administrative expenses12.
8%, rising by 1 every year.
0 per share; financial expenses decrease by 5 per year.
5%, financial expense ratio 5.
2%, rising by 0 every year.
The three averages are mainly due to the increase in short-term expenditures of the company and the increase in interest expenses.
In the first half of the year, the absolute value of the company’s expenses decreased, reflecting the good integration of Hytera and its overseas subsidiaries in sales, management and other aspects.
R & D expenses are 3.
600,000 yuan, basically the same as last year.
R & D expenses13.
3%, up by 1 each year.
In the first half of the year, the company’s intangible assets increased. Excluding the impact of the increase in amortization of intangible assets, the R & D expenses in the first half of the year steadily decreased.
The company’s R & D expenditure ratio decreased by 14 in the same period last year.
4%. In the future, we will further focus on key broadband applications, smart terminals, multimedia command and dispatch, and public network dedicated products, and gradually reduce non-core business investment.
The company is continuing to promote the transition of private network communications to new products, technologies, and services such as broadband, intelligence, and informatization in accordance with the initial goals. It will continue to increase innovation.
At present, wide-narrow-band fusion products have been delivered in mass production, and the third-generation converged command center has also begun to achieve large-scale commercial use at home and abroad.
3. Refined operating results are significant, and operating cash flow has continued to improve Since the third quarter of 2018, the company’s operating net cash flow has been positive for the first time, and cash flow has continued to improve.
Net cash flow from operating activities in the first half of 2019 reached 5.
9.4 billion, up 182 previously.
The operating cash flow in the first and second quarters of this year was 3 respectively.
09 ppm and 2.
USD 8.5 billion was mainly due to the company’s strengthening of the construction of the credit receivable management system and the increase in sales receipts.
The cash flow situation has continued to improve. It is expected that through the strengthening of the company’s receivable management and expense control, the cash flow will gradually improve.
The company’s asset-liability ratio (total debt / total assets) for the first half of 2019 was 58.
8%, which is a further improvement from the end of last year, and is down by 0 from the previous month.
In order to improve the company’s short-term debt repayment ability and reduce the debt repayment risk, the company issued a bond issuance plan again in July this year. It is expected that the bond issuance will not exceed 1 billion US dollars and the term will not exceed 5 years (including 5 years).
In the first half of the year, the company’s long-term receivables dropped significantly, and the days of accounts payable turnover increased, and the company’s supply chain management benefits were significant.
The company strengthened the management of receivables. As of June 2019, the company’s long-term receivables decreased by 1 compared with the end of last year.
From the upstream point of view, the company’s accounts payable turnover days have increased sequentially and in several years, the company has improved its upstream bargaining power, and its supply chain management has continued to optimize.
4. At the same time, the domestic and overseas markets made efforts to announce that the initial orders for large projects reached the best level in the same period in the beginning of the period. The number of large project landings and the amount of successful bids increased significantly.
In China, the company has built and delivered private network communication system projects in Hebei, Nanjing, Shenzhen and other provinces and cities, and customers have responded well.
At present, nearly half of the domestic PDT network construction. In the future, in addition to the continuous penetration of blank markets, the company will continue to achieve “wide and deep” coverage in established countries. Overseas, the integration effect of acquisitions will become more prominent, and global competitiveness and market share will steadily increase.
News of the successful bidding of overseas projects this year has repeatedly returned. The company continues to grasp the “Belt and Road” market, and in addition, has taken the lead in further consolidating the public safety field in Europe, while also contacting the Spanish sun company.
The market breakthrough is expected to be reflected in the income of the second half of the year.
5. The product structure continues to be optimized, and the contribution of new products of wide and narrow integration to the overall revenue has steadily improved. The traditional digital products of the company have developed smoothly at home and abroad. The arrival of new products is expected to become the company’s new growth driver.
With competitors in the industry, such as Motorola and Ou Yuhang, giving up self-developed broadband network technology and choosing to cooperate with large public network equipment manufacturers, Hytera has always adhered to independent research and development and laid out wide-narrow convergence areas in advance. Currently, it has gradually launched broadband broadband and multi-mode terminals., Multimedia command center, ad hoc network communications and other new products.
Among them, broadband and narrowband fusion products have been delivered in mass production, and the third-generation fusion command center has started large-scale commercial use at home and abroad.
At the beginning of 2019, the company won the bid for the R & D and mass production projects of China Mobile and the intercom independent brand series of terminals, thereby providing intelligent wide and narrow integration PoC terminals and accessories. The winning amount was 2.
8.8 billion yuan.
In July this year, it won the bid for the hardware equipment project of the Shenzhen Smart Urban Management Informationization Project. This project will use the company’s third-generation integrated command center related technologies and products, and the bid amount is 4885.
In the future, Hytera will enter more flooded law enforcement industries through public network dedicated products and through operator channels. It is also expected to undertake more overseas national operator business.
6. The implementation of the new business of wide and narrow integration brings high growth momentum to the company. It maintains the “Strongly Recommended-A” rating at home and abroad. The global market is developing steadily and the growth potential in Latin America is huge. The company’s performance in the second half of the year is expected.
The integration effect of overseas subsidiaries has become increasingly prominent.
The company has gradually transformed from a horse-growing and extensive growth to a refined operation for profit, and the cash flow situation has improved significantly.
As one of the world’s leading private network communications companies, the company has always insisted on the wide-narrow convergence technology through independent research and development.
Private network broadband is a deterministic trend in the industry and is expected to bring several times the growth of the market size.
The company’s wide and narrow convergence products have achieved large-scale production delivery. The third-generation converged command center has also started large-scale commercial use at home and abroad.
It is expected that the net profit attributable to mothers for 2019-2021 will be 7, respectively.
00 ppm, 9.
10,000 yuan, 11.
780,000 yuan, corresponding to 26 PE in 2019-2021.
3 and 15.
5 times, 无锡夜网 maintaining “strongly recommended-A” grade.
Risk warning: Business expansion is less than expected, expense control is less than expected, and market competition is intensifying.