HKUST News (002230) 2019 Interim Report Comment: Incremental Performance Results, Initial Revenue Optimization, Profit Inflection Point
The inflection point of 1H revenue optimization is in line with expectations. The incremental performance management drives the company to focus on per capita improvement. It is expected that the proportion of businesses with a high degree of productization in the company’s business structure will continue to increase, the growth rate of business with low profit quality will improve, and overall profitCapability will be improved, maintaining the company’s EPS forecast for 2019/2020/2021 of 0.41/0.70/1.06 yuan, maintaining a target price of 40.81 yuan and “Buy” rating. The performance was in line with expectations, and an inflection point in the optimization of revenue quality and profit appeared. We expect 2H to have higher performance flexibility.The company’s 2019H1 revenue was 42.28 ppm, +31 a year.72%, net profit attributable to mother 1.89 trillion, +45 ten years ago.06%, net profit after deduction is 31.63 million yuan, +56 a year.61%.Q2 single-quarter revenue of 22.700,000 yuan (ten years +25.25%), net profit attributable to mother is 87.57 million yuan (ten years +80.14%).In terms of expenses, the company’s expense ratio for the first half of the year was half a year.45% to 46.89%, of which sales / management / R & D / financial expense ratios are -1.99 / -0.06 / + 0.50 / + 0.10pcts.In general, the 1H income side, incremental performance management drives the high gross profit of education and 2C in the income structure, and the proportion of high-productization business has increased. The political and legal sectors affected by government expansion and October activities are expected to pick up in the second half of the year and maintain sustainability.Revenue growth?36% expectation; on the profit side, the talent pool is basically timely, the expense ratio is expected to continue to improve, and profits are expected to maintain high growth with the midpoint as the inflection point. AI strategy enters 2.In the era of 0, we 都市夜网 will increase per capita benefits with incremental performance management.The company will make efforts in 20192.0 strategy, further improve the track control panel in the core track, promote scale application, and increase performance as the key to improve the overall efficiency of the company with per capita gross profit as the core indicator.Judging from the situation in the first half of the year, the company achieved operating income from C business15.7.6 billion, an increase of 45 in ten years.45%; realized gross profit 8.4.9 billion, an increase of 41 in ten years.92%; C business accounted for 37% of overall revenue.28%, gross profit accounted for 39.79%, the proportion further increased.Thorough, education, politics, law, consumers, smart city track high-productization, high-gross business growth and transformation, core track control ability is further improved. The scale of the “platform” has been continuously expanded, and the “track” pattern has continued to strengthen.In terms of platforms, the application scale of Xunfei Open Platform continued to expand, with the number of developers reaching 1.03 million and revenue of 48,537.320,000 yuan, +55 a year.73%.In terms of race tracks, the company’s layout on various race tracks in key industries such as education, politics, law, healthcare, and smart cities has continued to strengthen: education products and services have achieved revenues of 97,875.760,000 yuan, +48 a year.86%; revenue from political and legal business reached 45,913.360,000 yuan, +31 a year.58%; revenue from smart hardware was 49,291.390,000 yuan, +47 a year.80%.By advancing the “platform + track” strategy, the company continues to develop the industry’s rigid demand + generation difference advantage to achieve large-scale applications. Risk factors: The investment projects are lower than expected, the C-end product promotion is lower than expected, and the cost control is lower than expected. Investment suggestion: combined with company artificial intelligence 2.The 0 era focuses on the concept of productization to improve per capita performance. We expect that the company ‘s business structure will have a higher proportion of products with a higher degree of productization. The business scale of low-quality businesses will increase, and overall profitability will improve.Maintain the company’s EPS forecast for 2019/2020/2021 to 0.41/0.70/1.06 yuan, corresponding to the net profit attributable to shareholders of the parent company were 9 respectively.00/15.34/23.2.3 billion. Maintain “Buy” rating and 6-month target price of 40.81 yuan.