Fire Communications (600498): Steady revenue growth continues to strengthen industry leadership

Fiberhome Communications released its 2018杭州夜网论坛 annual report, which achieved revenue of 242 during the period.

35 trillion, an increase of 15 in ten years.

1%; realize net profit attributable to shareholders of listed companies.

44 trillion, an increase of 2 in ten years.

29%.

Revenue grew steadily and business operations developed well.

Although affected by external events in the telecommunications industry last year, the company’s business recovery has been good, and revenue has been achieved twice.

1% steady growth.

The revenue structure is roughly equivalent to 2017, with communication equipment accounting for 61%.

77%, a decrease of 0.

9 optical fibers; fiber optic cable accounts for 26.

65%, an increase of 0.

74 single; data network products accounted for 10.

45%, an increase of 0.

35 units.

Gross profit margin during the period 23.

26%, an improvement from 2017; R & D expenses increased by 17.

81%; financial expenses increased by 85.

37%; return of investment and government subsidies related to income and other returns nearly doubled; net investment income increased by 37.

48%, net profit attributable to shareholders of listed companies increased slightly for many years2.

29%.

Generally speaking, the company’s long-term operation is stable and its business development is good.

Increasing procurement and investment shows that the company is still optimistic about the future prosperity.

In order to increase purchase payments and repayment balances, monetary funds for the period decreased by 25.

56%; the increase in sales scale increased account receivables by 33.

24%; short-term borrowings decreased by 31.
.

96%; while increasing the scale of procurement, while increasing bills payable4.

72%, accounts payable increased by 11.

78%; increase in infrastructure and fixed asset investment and net cash growth in investment activities36.

53%; net cash from financing activities changed from positive to negative, a decrease of 118.

86%, mainly due to the base digits of funds raised in the 2017 non-public offering.

The positive procurement and investment activities show that the company is still optimistic about the future industry prosperity.

Focus on the strategic main direction and make preparations for follow-up efforts.

In order to strengthen the technical strength and industry leading position in the field of optical communications, the company maintains high R & D investment: 2018 long-term R & D expenditure.

4 trillion, an increase of 18 in ten years.

6%, revenue accounted for 10.

48%; of which R & D expenditure is 22.
9.6 billion, an increase of 17 in ten years.
81%, revenue accounted for 9.

47%; R & D personnel account for over 41 in the total staff.

86%, the conversion rate of scientific research results remained above 90%.

In 2018, the company focused on the main channel direction of 5G, cloud computing, big data, rod fiber cables, etc., and achieved many on 5G bearers, telecommunication cloud platforms, optical rods and special optical fibers, marine networks, and industry-level big data processing and analysis platforms.The key breakthrough is fully prepared for the 5G market.

As the leading optical communications affiliate of the Xinke Group, Huo is expected to collaborate with wireless services to help the overall solution continue to improve in the 5G market.

The State-owned Assets Supervision and Administration Commission approved the merger of the Chinese Academy of Posts and the Chinese Academy of Sciences to form the Xinke Group, which covers the complete and powerful optical communications industry chain, including the wireless main equipment and system integration capabilities.New equipment.
The start of 5G brings a rare window of the wireless market, and the local market will provide significant support.

Based on its strong optical communications capabilities, Fiberhome actively implements the “cloud-network integration” transformation strategy. It has developed steadily in areas such as cloud computing, big data, information security, and the Internet of Things.

As the leader of Xinke Group’s main equipment, it is expected to cooperate with the wireless business and even play a role in the overall plan, helping the group to achieve substantial improvements in scale and industrial advantages in the local 5G market competition.

Profit forecast and estimation: We expect the company to achieve a net profit of 10 from 2019 to 2021.

12 billion, 12.

1.1 billion and 14.

780,000 yuan, corresponding EPS is 0.

87, 1.

04 and 1.

26 yuan.

Based on the company’s leadership and the industry’s development potential, the company will be given a price-earnings ratio of 35 times in 2020, with a target city size of 42.4 billion U.S. dollars and a BUY rating.

Risk alert events: risk of poor operator investment, less than expected risk of overseas expansion, and technical and competitive risks of data network related services