Guiguang Network (600996): Profit-bearing pressure on rural ratings and smart broadcasting in the promotion period of the people ‘s livelihood project is worth looking forward to

Guiguang Network (600996): Profit-bearing pressure on rural ratings and smart broadcasting in the promotion period of the people ‘s livelihood project is worth looking forward to
Event: The company released its semi-annual report for 2019.In the first half of 2019, the company achieved operating income of 15.USD 3.8 billion, an annual increase of 7.15%; net profit attributable to mothers1.50 ppm, 37-year average.55%; realize net profit after deduction of non-return to mother 1.33 ‰, an average of 41 per ten years.61%.  Opinion: Engineering revenue and data business drive a slight increase in revenue.1) The company achieved operating income in the first half of 201915.38 ppm, a ten-year increase of 7.15%; mainly benefited from the continuous advancement of the people’s livelihood project construction in Guizhou Province and the growth of data business related to government and enterprises; 2) The company’s engineering business in 2019 has progressed smoothly, mainly including three major projects: First, the cable of the comprehensive test zone of the smart broadcastingThe wireless converged network coverage project has now completed the construction of 1,000 base stations and the nation’s largest LoRa narrowband Internet of Things; the second is the Xueliang project, which was newly built in the first half of the year.There are 30,000 monitoring points, and 30,000 are planned for the whole year. The third is the “Radio and Television Cloud” household project, which will add another 320,000 households in the first half of the year, thereby planning 500,000 households.  The company’s ratings business is sinking along with product upgrades, and its broadband business continues to advance.1) As of the end of June 19, the company’s cable digital television city network users 3.94 million, an increase of 2 over the same period last year.07%; 4.03 million rural network users, an annual increase of 32.13%; 5.09 million HD terminal users, an increase of 32 over the same period last year.55%; 2) As of the end of June 19, the company’s broadband subscribers reached 2.55 million, an increase of 34 over the same period last year.20%.Future ratings and broadband revenue are expected to continue to grow.  The gross profit margin was dragged down by the increase in depreciation booths and operating costs of the engineering business. The sales and management expense rates fell, and the R & D and financial expense rates rose.1) The company’s gross profit margin in the first half of the year was 33.23%, compared with 38 in the same period last year.78% formaldehyde 5.55, mainly due to the spread of depreciation stalls relative to the increase in revenue in the early stages of the completion of engineering and infrastructure; 2) The sales expense ratio decreased by 0.94% to 2.58%, the management expense ratio decreased by 3.00 to 9.60%, operating efficiency has improved; 3) R & D expense ratio rose by 0.78% to 4.36%, smart radio and television research and development efforts increased; 4) financial expense ratio rose 4.62% to 5.74%, mainly due to the increase in financial costs due to construction loan supplementary projects.  Profit forecast, investment rating and estimation: 深圳桑拿网 The company’s scale of construction of people’s livelihood projects will lead to increased costs in the short to medium term and pressure on gross profit margins; long-term rural viewing business and smart broadcasting business are expected to contribute.Reduce the company’s EPS to 0 in 19-21.21/0.28/0.35 yuan, corresponding to PE46 / 35 / 28x, maintaining the “overweight” level.  Risk warning: Receipts and broadband ARPU are not up to expectations, user loss, and increased competition