Depth-Company-Ziguang Co., Ltd. (000938): 15% increase in main business, customer structure enhanced, multiple features

Depth * Company * Ziguang (000938): 15% increase in main business

The company released its 2019 Interim Report: 228 revenue.

700 million (+2.

0%), net profit 8.

5 billion (+15.

5%), deducting non-net profit 6.

0 billion (+2.


The business structure has improved, and operators’北京夜网 5G demand has grown rapidly, which will become a focus in the second half of the year.

Maintain BUY rating.

Key points of support level The 15% growth rate of the core business of infrastructure is in line with expectations, and the benign indicator of the distribution business.

Revenue from core business “digital infrastructure and services” 115.

100 million (+15.

1%) in line with expectations; revenue from “IT product distribution and supply chain services” was 141.

5 billion (+2.

8%) noticeably flawed.

Since Xinhua III is the domestic total distributor such as Hewlett-Packard, the distribution business also has an impact on the performance growth of Xinhua III’s subsidiaries.

In addition, Q2 has a reason for the change in the settlement method of the procurement service.

H1 gross profit margin has therefore 北京夜网 increased significantly to 22.

5% (infrastructure gross margin decreased by 2.

4pct or guided by server expansion growth.

R & D funding 18.

The 200 million (+ 15%) growth rate matches the core revenue growth rate.

In 2019H1, the external environmental pressure was overcome, and the overall performance was stable.

Although the growth rate is slower than Q1, the previous prediction has not changed.

5G has increased operator business, and additional features have started to appear in its revenue structure.

One reason for not expecting change is also related to customer structure.

In 2019, the operator’s business increased rapidly, and the proportion increased because the company began to improve the operator’s product line and superimposed the start point of the 5G construction cycle.

It is expected that the proportion of operators is expected to increase significantly from the previous 10%.

Affected by the settlement cycle of the operator’s customers, the fineness of the performance improvement has shown a small feature in the first (half a year) and a large feature in the latter (six months).

H2 information security, operators and overseas as the starting point.

19H1 prepayments and inventory increased by 152% and 31%, much higher than the growth rate of the previous year.

The first reason is to deal with the uncertainty of the supply chain, and it also shows that it is looking forward to the force: the company’s largest share recently won the bid for one of the operator’s hardware firewall collections; the 5G station is leading.

Estimated to fine-tune 2019 due to distribution control and R & D growth?
Net profit to 20 in 2021.

2, 27.

7 and 37.

200 million, EPS is 0.
99, 1.

36 and 1.
82 yuan (down 4?
13%), corresponding to PE, 35, 25 and 19 times.

The estimated growth rate matches and does not fully reflect the company’s leading position in the ICT industry, and maintains a BUY rating.

The main risks faced by the rating are that the business development of the operator is less than expected; the inventory price has been lost.