Qianfang Technology (002373) 2018 Annual Report Commentary Two Wings Fly Together Drive High Performance of the Company

Qianfang Technology (002373) 2018 Annual Report Commentary “Two Wings Fly Together” Drive High Performance of the Company

Event: The company released its 2018 annual report. In 2018, the company achieved operating income of 72.

510,000 yuan, an increase of 35 compared to the adjusted operating income in 2017.

35%, achieving net profit attributable to mother 7.

63 ppm, an increase of 63% from 2017’s adjusted net income to mothers

80%.

Key points of investment: “Flying with both wings”, driving high growth of the company’s performance 1) Smart transportation.

In 2018, the company’s smart transportation business realized revenue34.

93 ppm, an increase of 19 years.

40%.

In the field of smart high-speed, the company’s related orders in 2018 reached the best level in history, ranking first, and the granularity of the project has also been improved; in the field of urban smart transportation, it is 0.

The US $ 9.9 billion bid for the annual largest mass TOCC project-Huizhou (TOCC) project, further reflects the company’s leading position in the TOCC field, establishes an independent urban smart transportation sector, and comprehensively cuts into the comprehensive urban traffic management business to achieve Beijing’s “Zhongguancun”Benchmarking projects such as “Comprehensive Traffic Governance in the 四川耍耍网 Western District” and “Integrated Traffic Governance in the Chaoyang CBD” were implemented; in the field of rail transit, the company’s related orders in 2018 reached a record high. Rail transit passenger information service systems (PIS) have been in Beijing, Shanghai, etc. More than a hundred subway lines in more than one city have been applied, and the core system accounts for about 60% of the country’s market share. In the field of transportation big data, the company has built a large-scale transportation big data resource pool, covering an average daily mileage of 8 million kilometers.More than 50 million pieces of effective data are collected every day, and the FCD location information is more than 20 billion.

The company’s smart transportation business has maintained a better development trend. The traditional advantageous business areas continue to lead and actively expand emerging businesses. These new businesses have made progress.

2) Intelligent security.

In 2018, the company’s smart security business achieved revenue of 36.

9.6 billion, an increase of 53 in ten years.

90%.

In 2018, the company further strengthened its smart product layout, upgrading its AI product series from “four mountains and two hurdles” to “six mountains and two hurdles”. At the same time, it transformed cloud and big data to give full play to the competitiveness of smart product markets and help various industriesCustomer value enhancement and business model innovation.

We believe that the increase in intelligent penetration has further promoted the entry barriers and competition barriers of the security industry. The market concentration of the security industry will further increase in the future, which will fully benefit leading enterprises.

According to his report, in 2017, the market share of Yushi Technology ranked third in the Chinese video surveillance equipment market, and ranked sixth in the global video surveillance equipment market. Compared with the twelfth largest market share in 2014, 2015The eighth place of the year continued to improve, and the industry segmentation continued to improve.

It is expected that the global market share of Yushi Technology will be further increased in the future.

Keeping pace with development trends, comprehensively deploying the intelligent connected car industry At present, the company has launched the V2X series of products, which can provide safe and efficient full-line product and service support for the vehicle-road collaboration and intelligent connected car industry.

The company’s V2X technology successfully passed the world’s first “three-span” interconnection and interoperability test. The Intelligent Vehicle Alliance Industry Innovation Center completed an autonomous driving road test with a mileage of over 120,000 kilometers.

In addition, the company and Baidu Apollo jointly developed a vehicle-road collaboration device for autonomous driving that has been deployed in the northern section of the Yansong Expressway.

The company keeps up with the development trend of the industry, and continues to promote the strategic layout of the V2X field from the dimensions of policy standards, technology products, and industrial ecology.

To sum up the profit forecast and investment rating, we are optimistic about the company’s future development. It is expected that the company’s EPS for 2019-2021 will be 0.

66, 0.

81 and 1.

00 yuan / share, maintaining the “overweight” rating.

Risks prompt macroeconomic risks; the advancement of smart security business is less than expected; the advancement of connected car business is less than expected.