Guomai Technology (002093) 2018 Annual Report and 2019 First Quarterly Report Review: Business Structure Continues to Optimize, IoT Industry Has Unlimited Potential

Event: Guomai Technology released the 2018 annual report and the 2019 first quarter report. In 2018, the company achieved operating income9.

8.4 billion (YoY-35.

15%), realizing net profit attributable to mother 1.

3 billion (YoY-20.

00%), the company intends to take 10.

0.8 billion shares is the base number, and a dividend of 0 per 10 shares is distributed to all shareholders.

15 yuan (including tax).

In Q1 2019, the company realized operating income1.

3.2 billion (YoY-65.

25%) and realized net profit attributable to mother 3578.

780,000 yuan (YoY-44%).

Opinion: The company’s Q1 performance in 18 and 19 was under pressure, and the announced results slightly exceeded the 18-year performance report, which was in line with market expectations.

Affected by the expansion of the telecommunications industry’s capital expenditure and business structure adjustment in 2018, the company’s performance has improved, and the company achieved operating income in 20189.

8.4 billion (YoY-35.

15%), realizing net profit attributable to mother 1.

3 billion (YoY-20.

00%), the actual net profit situation is slightly higher than the one published in the 18-year performance bulletin.

2.2 billion.

Affected by macro-policy restrictions in 19Q1, the company’s IoT Science Park operating and development services revenue declined, affecting the first quarter performance.

The business structure was continuously optimized, and the proportion of high gross margin business increased.

In 18 years, the company adjusted and optimized the business structure and shrank the IoT technology service business with gross margin reset, so that the business’s 18-year revenue scale was 5.

3.7 billion (YoY-42.

87%), with a gross profit margin of 0.

93% (-6.

03pcts), the proportion of revenue dropped from 62% to 54.


The company’s Internet of Things consulting and design services achieved operating income for 18 years1.

3.4 billion (YoY-21.

21%), gross profit margin reached 87.

74% (4% year-on-year.

62pcts), with a revenue share of 13.


The company’s education business achieved income for 18 years1.

1.3 billion (+ 22% YoY).

02%), with a gross profit margin of 87.

56% (+6.

22pcts), with an income share of 11.

53%. The company’s IoT Science Park operation and development services revenue reached 1.

8.4 billion (YoY-37.

93%), with a gross profit margin of 71.

82% (+9 compared to the same period last year).

83pcts), with a revenue share of 18.


Benefiting from the optimization of the company’s business structure, the company’s overall gross profit margin was 32 in 2017.

84% increased to 37 in 2018.


The statutory rate has increased slightly, and the proportion of R & D promotion has increased to 4,839 in 2018.

300,000 yuan (YoY-27.

08%), selling expenses 4.

92% (+0.

54pct); administrative cost is 1.

2.5 billion (YoY-11.

73%), management fee expenses 12.

70% (+3 year-on-year.

37 pcts); financial costs are 4179.

640,000 yuan (YoY-12.

99%), financial expenses4.

25% (+ 1% year-on-year.


Considering that the company’s 18-year sales revenue has decreased, the overall cost control is reasonable, and the fee rate has increased slightly.

In terms of R & D funding, the company has 460 R & D personnel in 18 years, accounting for 48 of the total staff.

09% increased to 53.

86%; R & D investment amounted to 5650.

180,000 yuan (YoY-3.

74%), and R & D promotion accounted for 5.

75% (+ 1% year-on-year.

88pcts), ranking improved in 2017.

In 19G 5G scale test, 4G heavy farming drove the telecom industry’s capital expansion to stop falling and rebounded, and the network planning and design business benefited deeply.

Benefited from 5G scale test construction and 4G re-cultivation in 19 years, according to forecast data displayed by operators and towers, the capital expenditure of the telecommunications industry is expected to reach 330 billion (YoY + 4北京夜网%). Mobile, telecommunications, and Unicom are expected to be in the 5G construction in 19 years.Appropriation does not exceed 170/90/60?
8 billion yuan.

According to the budget estimates disclosed in the annual reports of the three major operators and Tower Corporation, it is expected that the wireless capital expansion in 19 years is expected to reach about 180 billion US dollars, an increase of 16%.

Due to the higher bandwidth of 5G, about 4G needs to use a larger number of macro stations and is assisted by a large number of micro stations, which increases the complexity of network planning and design.

Guomai Technology’s network planning and design business has been recognized by domestic operators and corporate customers during the 4G construction period. During the peak construction period, the company’s overall business revenue reached nearly 300 million US dollars.

We believe that during the peak period of 5G network construction in the future, Guomai Technology’s network design and planning business is expected to reach nearly 500 million US dollars.

The company’s education business gathers high-quality technical personnel to improve the company’s profitability, which is the foundation of the 5G and Internet of Things business.

Fuzhou Institute of Technology was upgraded to an undergraduate application-oriented college in 2015. It has established 42 majors in this field, focusing on five major professional groups such as Internet of Things, cloud computing and big data, Internet + architecture, Internet + finance, and Internet + business.

By the end of 2018, the number of students in Fuzhou Institute of Technology exceeded 7,200. In the future, the company will continue to improve its professional settings and gradually increase the proportion of undergraduates. The scale of enrollment is expected to reach 1?1.

20,000; the college currently charges 2.
At around 5 million / year, we expect future revenue to stabilize at around 2.


0 million.

The company’s core business network planning and design belongs to a labor-intensive industry. Fuzhou Institute of Technology can reserve a large number of interns and school recruitment sources for the company, which has obvious competitive advantages.

Deeply cultivating the IoT industry chain has broad business growth space.

The company’s business strategy is initially clear. Through the Internet of things technology services, Internet of things park operations, Internet of things consulting and design, and Internet of things-related education services, the Internet of Things industry chain will be deepened.

According to Gartner’s prediction: By 2020, there will be 26 billion IoT devices worldwide and the market size will reach 1.

9 trillion US dollars, huge market space.

With the gradual application of NB-IoT and the development of 5G construction, the domestic IoT industry will significantly expand the application scenarios and realize the rapid expansion of the industrial scale.

Guomai Technology will make full use of the advantages of technology accumulation, industrial resources and human resources to achieve rapid growth of business transformation.

Profit forecast, forecast and rating combined with 2018 annual report and 2019 first quarter report, taking into account the company’s business transformation in 18 and 19Q1, and network planning and design business, one of the company’s main sources of net profit, will deeply benefit from 5G launched in 19 Construction, it is expected that the number of carry-on orders for 5G scale testing will increase significantly. We maintain the company’s 19?
The 20-year return to mother’s net profit forecast is 1.


460,000 yuan, in addition to 2021 net profit attributable to mother is forecasted to be 3.

150,000 yuan, corresponding to 19?
21 years EPS0.



31 yuan, corresponding to PE of 60X / 43X / 34X, maintaining the “buy” level.

Risk warning: 5G network construction progress is less than expected, and the company’s business optimization and conversion progress is less than expected.