Shuangchuang Electronics (600990): Short-term performance of business structure adjustment and recovery of radar orders can be expected in the future

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Shuangchuang Electronics (600990): Short-term performance of business structure adjustment and recovery of radar orders can be expected in the future

Event On January 22, the company issued an announcement of the 2019 annual results reduction. It is expected that the net profit attributable to mothers in 2019 will be converted from the same period of the previous year, which will be reduced by 126.65 million yuan to 16.75 million yuan, at least by 50% to 65%.

Brief comment on business structure adjustment. Short-term performance growth, radar orders pick up. Future growth is expected. On January 22, the company issued a 2019 annual performance pre-reduction announcement. It is expected that net profit attributable to mothers will reach 9004 in 2019.

670,000-12873.

670,000 yuan, a year-on-year decrease of 50% to 65%, net profit after deduction is 4,745.

740,000 yuan-8542.

740,000 yuan, a year of 55% to 75%.

The preliminary results of the company’s 2019 performance reduction are: 1. Report size. The company focuses on the main business and shrinks non-core businesses, resulting in a reduction in overall revenue and profit scale. 2. Bowei Changan received compensation for plant demolition in 2018, affecting the previous yearThe asset disposal income was about 54 million yuan; 3. After the company’s new industrial park was transferred to use, fixed costs such as depreciation and amortization increased.

At present, the company is in the period of income structure adjustment. The recovery of radar and supporting services will provide impetus for the improvement of performance.

At present, the company is shrinking its non-core business. The revenue scale of public safety products and energy system products has decreased compared with the same period of the previous year. The increase in advances from customers in radar and ancillary services indicates that orders have picked up, which has led to a significant increase in inventory when the products are put into production.Delivery phase.

From the company’s three quarterly report, the gross profit margin for sales was 16.

07%, compared with 11.

44%, the company’s profitability will be greatly improved after the adjustment of the income structure, and the recovery of orders for radar and supporting products will provide a boost for the company’s performance.

Equity transfer was implemented, the value of the capital operation platform highlighted the implementation of equity transfer, and the three-tier organizational structure was gradually improved.

In November 2017, the CLP Group agreed in principle to form the CLP Bowei Group, which was converted into the entire existing shares of Shichuang Electronics held by 38 and transferred to CLP Bowei for free; September 2018On September 3, 2019, CLP Bowei Group completed the industrial and commercial registration; on September 3, 2019, CLP approved the transfer of the shares within the group company for free; on September 10, the company issued an announcement saying that the 38CLP Bowei’s high-level “Regular Equity Free Transfer Agreement” will hold 38 companies45.

67% of the original shares were transferred to CLP Bowei for free.

The listing platform of CLP Bowei Group is partially highlighted, and capital operation is expected to be strong.

CPIC’s affiliated institutes include 8, 16, 38, and 43 institutes, and 4 institutes have fully utilized technology reserves and comprehensive strength in the fields of fiber optic cables, superconductors, radar, microsystems and components.Among them, 38 are currently one of the most technologically advanced research institutes in the field of radar in China, with advanced production capabilities for many types of radars, such as ship-borne, vehicle-mounted and air-borne platforms.

After the completion of the equity transfer, the company’s role as the capital operation platform of the CLP Bowei Group has been further highlighted. Due to the reduction in the degree of confidentiality of assets of the Department of Electric Science and Technology, the future asset injection is expected to be profound.

We judge that in 2019, the capital operation of central enterprises in military industry may still be dominated by enterprise assets, and the injection of assets in institutions has gradually approached.

On August 23, 2019, Guorui Technology’s major asset reorganization plan was approved by the National Defense Science and Industry Bureau, which has great significance, providing a new path for the core institutions to inject core assets into listed companies, or it will become a new progressive plan for institutional reform, and thenSimilar investment opportunities deserve attention.

Profit forecast and investment advice: The value of the capital operation platform is prominent, and future assets can be injected into the space. The company will maintain its shareholding level as the leader of the internal radar industry. Weather radar, air traffic control radar and alert radar products occupy a certain market share in the military and civilian 北京男士会所 markets. Future radarBusiness progress is gradually picking up and improving; the company, as the operation platform of CLP Bowei Capital, may benefit from the continuous reform of scientific research institutes, and future asset injection space is expected.

It is expected that the company’s net profit attributable to its mother from 2019 to 2021 will be 1.

2.5 billion, 1.

6 billion, 2.

06 ppm, with a ten-year increase of -51.

24%, 27.

86%, 28.

69%, corresponding to 0 EPS from 2019 to 2021.

79, 1.

01, 1.

30 yuan, corresponding to the current expected PE is 54, 43, 33 times, respectively, maintaining the overweight level.