Fire Communication (600498): Third-quarter results under pressure, gross profit significantly improved, 5G construction releases new momentum for performance development

Fire Communication (600498): Third-quarter results under pressure, gross profit significantly improved, 5G construction releases new momentum for performance development

Investment Highlights Event: The first three quarters of 2019 achieved operating income of 177.

75 ppm, a ten-year increase2.

32%, net profit attributable to mothers6.

19 ppm, 10-year average1.

86%, of which 57 achieved operating income in the third quarter.

90 trillion, a molecular weight of 18 ring.

5%; net profit attributable to mother 1.

92 trillion, molecular weight 26.

55%.

The third-quarter performance rate was lower than expected, and the gross profit margin improved significantly: the current point in time is at the end of the 4G investment period, and the performance-driven effect shifts.

In terms of gross profit margin, gross profit margin of 24 was achieved in the third quarter of 2019.

78%, an increase of 7 from the second quarter.

06pp, to achieve a net interest rate of 3.

51%.

The first three quarters achieved a gross profit margin of 21.

93%, a decrease from the end of 20181.

33pp.

The improvement of gross profit is primarily the optimization of product structure, and the proportion of high-margin product revenue has increased.

Stable research and development ratio of more than 10%, technology continues to lead: Fiberhome uses more than 10% of revenue every year for research and development of core and forward-looking technologies, and continues to maintain high-end, key core technology R & D efforts, the first three quarters of 2019Medium-term R & D expenditure 19.

44 trillion, accounting for 10% of operating income.

94% occurred in the third quarter.

470,000 yuan, accounting for 12% of operating income.

91%.

Strengthen the strategic layout, both customers and the industry: Focus on intensive cultivation of existing customers, expand the value of customers’ business ideas, overall planning, and meticulous intervention. On the basis of retaining potential value customers, they will 无锡桑拿网 gradually become strategic customers, and large customers will be transformed into new values.client.

The optical communications market has always been the main battlefield of Fiberhome Communications. At the same time, it has continued to focus on vertical industry, network security, rail transit, political and legal advantages, and other market segments; actively expand incremental markets such as government, health, and distribution.

Benefiting from the continued prosperity of the optical communications market, the performance kinetic energy will continue to be released: As the spectrum of 5G base stations is higher and the coverage area is smaller, so to achieve the same communication effect as 4G, the number of new 5G base stations will increase by multiples.

According to the statistics of Zhizhi Consulting, the global optical network equipment city size was US $ 12.5 billion in 2015, and it is expected to reach US $ 14.5 billion in 2020, an annual increase of 3%.

57%.

At the same time, according to the optical count forecast, the size of China’s optical communications market doubled within 5 years.

Profit forecast and investment grade: We expect the company’s operating income for 2019-2021 to be 299.

23 ppm, 372.

17 trillion and 467.

00 ppm, EPS is 0.

89 yuan, 1.

14 yuan, 1.

47 yuan, corresponding to the corresponding PE is 30/23 / 18X, maintaining the “buy” level.

Risk warning: 5G deployment progress is less than expected; network construction progress is less than expected; product development progress is less than expected.

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