Donggang shares (002117): Q2 results are slightly under pressure and expected to increase in the long term

Donggang shares (002117): Q2 results are slightly under pressure and expected to increase in the long term

[Event]Donggang released its semi-annual report for 2019 and achieved revenue of 8.

49 ppm, an increase of ten years.

41%, net profit attributable to mothers1.

42 ppm, a ten-year increase of 7.

61%, an increase of 5 in the next ten years.


Among them, Q1 revenue / net profit grows by 8 per year.

16% / 17北京夜网.

56%, second quarter revenue / net profit breakdown twice a year.

97% / 0.


Performance was basically in line with expectations.

[Comment]1) Revenue is stable and technical service business is under pressure.

①The income of traditional printing products increases by 0 every year.

56%. Although the industry is shrinking and shutting down partly prevents product lines, the company maintains customer stickiness and guarantees stable revenue.

② The revenue of covered products increased by 21 each year.

85%, of which smart cards increased by 32%, social security cards and bank cards were invested in the market on a large scale, and the trend is expected to continue.

③ Revenue from technical services decreased by 13 year-on-year.

91%, of which the annual growth of the archival business is 12%, the further development of the customer base, the growth of the electronic ticket business by 22%, the development of non-tax bills has progressed, the lottery business has improved, the main department’s bidding and settlement cycle changes, but it is expected that the whole yearmore than a year.

2) Profitability is picking up.

① The overall gross profit margin increased by 1.

0pct to 39.


Among them, the traditional printing gross margin decreased by 0.

3pct, although the price of raw materials has fallen, the proportion of low-margin products has increased slightly, which has stabilized profits; the gross profit margin of covered products has increased.

3pct, the profitability of technical services also continued to increase, mainly due to business development to increase capacity utilization and release of scale effects.

② The expense ratio remained stable during the period, and the R & D expense ratio decreased by 0.

6pct, mainly due to the expansion of dilutive expenses, is expected to continue the trend.

3) Future highlights: The main printing industry benefits from customer development + product upgrades. It is expected that the revenue will be stable and the control costs will improve profitability. Smart cards will continue to expand into the market and are expected to maintain high growth. E-tickets are the general trend, and the blockchain will improve its profitMode; the archival storage service group continued to expand, and gross profit improved under the scale effect; terminal lottery accelerated in the second half of the year, and it is expected to maintain a two-digit growth.

In addition, the subsidiary Donggang Ruiyun intends to reform the joint-stock system and apply for listing on the science and technology board to expand financing channels.

4) Investment rating: We estimate Donggang’s net profit for 2019-2021 3.



9.9 billion yuan, corresponding to PE of 19.



8 times.

The company’s traditional main business is stable, the new business contributes flexibility, and the dividends are attractive. It is recommended. Risk warning: Bill printing industry shrinks sharply, new business launches fall short of expectations

Megmeet (002851) 2019 Interim Report Performance Preview Comment: Performance Forecast Growth Rate High Technology Advantages Layout Forces

Megmeet (002851) 2019 Interim Report Performance Preview Comment: Performance Forecast Growth Rate High Technology Advantages Layout Forces
The company released a performance forecast, and the net profit attributable to mothers in 2019 is expected to be 1.37-1.6.9 billion yuan (same increase of 110%?160%), the performance continued to exceed market expectations.Increase the company’s net profit forecast attributable to mother to 2019-2021.39/4.53/5.5.3 billion.The company builds a technology platform and builds multi-track high-quality assets. The model is continuously obtaining performance certification. The reasonable estimate range for 2019 is 35x-40x, and it maintains a “buy” rating. The performance forecast exceeded expectations and high growth continued.The company released the 2019 semi-annual performance forecast, which is expected to achieve net profit attributable to mothers1.37-1.690,000 yuan (previously + 110%?160%), exceeding market expectations.After completing the minority equity acquisition of the three core subsidiaries in September 2018, the company began to enter a period of explosive performance. Among them, smart bathroom products ushered in explosive growth in 2018. After entering 2019, the company’s new energy vehicle electronic control products ushered in importantThe product upgrade of the customer BAIC New Energy, the company’s development model of “technology platform to help asset growth, diversified layout aligned with high-quality race tracks”, led to rapid growth in performance. Aiming at high-growth industries, the potential of diversified layout is unlimited.The company’s current main business layout is reasonable and maintains balanced development in multiple fields.The company’s overall layout of the downstream industries includes: the high-speed growth blue ocean market (smart bathrooms, new energy vehicles, 5G), the industry that is about to usher in an inflection point (rail transit), and the industry that is growing steadily (medical power supply, home appliance conversion market).While improving the diversified layout, the company combined with the overall downstream demand for the better, giving full play to its own advantages in technology, customers, and partners, and under the situation of rapid growth in performance, it also continued to control the operation and development risks. The acquisition of minority equity in core assets has long-term positive profitability.In September 2018, the company completed the acquisition of Jardine Sanitary, Shenzhen Driven, and Shenzhen controlled a minority stake, with its shareholding ratio rising to 86% / 99.7% / 100%.The above-mentioned companies are facing high prosperity and high certainty industries such as smart bathrooms, new energy vehicle electric drives, rail transit air-conditioning control products, etc. The three companies have respectively achieved over-completion rate of 5 in 2018.3% / 67.1% / 8.8%.In April 2019, the company issued a case of convertible bonds, intending to spend part of the funds raised, and further acquire the remaining 14% minority shareholders’ equity in Jardine Bathroom: It is planned to raise 6 through convertible bonds.5.5 billion yuan, of which 1.50,000 yuan is intended to be used to acquire 14% equity of Yiyihe Bathroom (if completed, the company will hold 100% equity of Yiyihe).The performance promises of the three subsidiaries mentioned above for 2019 are RMB 95,700, and RMB 18 million, respectively. The company’s performance continues to increase its momentum. Risk factors: The production and sales of new energy vehicles are lower than expected; the demand for inverter household appliances and smart bathrooms is weak; the progress of rail transit construction is lower than expected; the manufacturing industry is in a downward trend. Investment suggestion: The company relies on the advantages of the three major technology platforms built by itself, shortens the track, has high-quality assets for customers, and diversifies the advantages of the acquisition of minority equity in core assets.The net profit attributable to mothers is forecasted to be 3 in 2021.39/4.53/5.53 trillion (previous forecast was 3.21/4.08/4.5.7 billion), corresponding to 2019/20/21 EPS forecast is 0北京保健按摩.72/0.97/1.18 yuan, corresponding to the current expected PE of 27x / 20x / 17x, we think the company’s reasonable range for 2019 is 35x-40x PE, maintaining the “Buy” rating.