Shuangchuang Electronics (600990) Annual Report Commentary: Performance Meets Expectations Focus on Follow-up Capital Operation Progress

Shuangchuang Electronics (600990) Annual Report Commentary: Performance Meets Expectations Focus on Follow-up Capital Operation Progress

The 2018 performance was in line with expectations, and radar and radar supporting business grew steadily. In 2018, the company achieved operating income of 52.

46 ppm, a 10-year increase3.

75%; realize net profit attributable to mother 2.

570,000 yuan, an increase of 27 in ten years.

82%; net profit after deduction to non-returned mother1.

89 ppm, with a ten-year average of 13.

19%; gross margin is 14.

95%, increase by 1 every year.

34 units.

Among them, Bowei Changan achieved revenue of 20.

2.6 billion, net profit1.

8 billion.

We believe that the increase in long-term operating income is mainly due to the steady growth of radar and radar supporting 合肥夜网 businesses, and the rapid increase in income from the transformation of grain storage informatization.

The growth rate of performance was higher than the growth rate of revenue, which was mainly because the subsidiary Bowei Changan disposed of land in the old district and obtained 5411.

30,000 yuan in asset disposal income.

We expect the company to achieve EPS of 1 in 2019-2021.

68, 1.

84 and 2.

03 yuan / share.

Maintain “Buy” rating.

The transformation of military-civilian fusion radar system suppliers is gradually getting better, and it is expected to grow steadily in the next three years. In 2018, radar and radar supporting business will achieve revenue20.

90 ppm / + 27.

23%, gross margin is 21.

49%, previously subdivided into 4 segments.

Report information, the company’s weather radar successfully won a number of military and civilian product and system projects, the first software radar and weather integrated detection system development and other new directions made breakthroughs; air traffic control radar successfully won the civil aviation air management radar construction engineering system project;Radar benefited from the gradual improvement of the national radar alert system to achieve stable growth; the decline in gross profit margin was due to the increase in the proportion of low-margin radar supporting business income during the overhaul cycle.

We are optimistic that the company’s military-civilian fusion radar business will transform from an equipment manufacturer to a system supplier to achieve a new leap forward.

Significant improvements in public safety business and expansion of new growth poles in the smart industry.From 2018, the company selected high-quality cities and projects, implemented policies, and developed in the downstream areas of safe cities and intelligent transportation.Transformation of operation services, and gradually landing new security products.

Public safety business achieved operating income in 201814.

11 ppm / -12.

19%, gross margin is 12.

43%, up 4 singles previously.

In 2017, through the acquisition of Bowei Changan, the smart industry was extended to the mobile security equipment and smart food industries to create new growth poles.

In 2018, the mobile security equipment and smart food industries achieved operating income7.

2.6 billion / + 1.

22%, 2.

10 ppm / + 1359.


We believe that the company has ample orders in hand, which will steadily increase the expected basis for the smart city business revenue scale and gross profit margin in the next three years. Backed by 38 companies, the only listed platform of CPIC Bowei Group, the platform value highlights November 2017, CPIC established a new Bowei Group, hosting 8 companies, 16 companies, 38 companies and 43 companies.As a listing platform for the future business development and capital operation of the subsidiary group.

After the establishment of CLP Bowei, Sitron Electronics will significantly increase the volume of pro forma assets as a listing platform, highlight the company’s platform value, and have a large space for asset securitization. It will continue to focus on the progress of the company’s asset injection.

Optimistic about the company’s capital operation to accelerate, adjust the target price to 58.


2 yuan / share considering the asset disposal income generated by the company in 2018, it may not be sustainable in 2019-2021, and the expansion rate of the business scale with low gross profit margin may change. We adjust the company’s performance in 2019-2021 to achieveOperating income 54.

70 (previous value was 59.

52, down 8.

8%), 58.

61 (previous value was 66.

50, down 13.

5%) and 63.

1.2 billion, net profit attributable to mother 2.

67 (previous value was 2.

65, increase by 0.

7%), 2.

93 (previous value was 3.

73, down 27.

3%) and 3.

2.3 billion.

In 19 years, the average PE of the A-share comparable company is consistent with the expected wind direction. The average PE is estimated to be 44 times. We give the company a PE estimate of 35-40X in 2019 and raise the target price to 58.


2 yuan / share.

Maintain “Buy” rating.
Risk Warning: The growth of military expenditure gradually exceeds expectations, and the development of weapons and equipment is not up to 佛山桑拿网 expectations.