Fiberhome Communications (600498) 2018 Annual Report and 2019 First Quarterly Report Review： Steady Improvement
Fiberhome Communications (600498) 2018 Annual Report and 2019 First Quarterly Report Review: Steady Improvement
Event 1. On the evening of April 26, the company released its 2018 annual report. In 2018, the company realized operating income of 242.
3.5 billion, net profit attributable to mother 8.
4.4 billion, net of non-attributed net profit.
95 ppm, with an average of 15 each year.
75%; 2. On the evening of April 29, the company released the first quarter report for 2019.
810,000 yuan, net profit attributable to the mother1.
6.7 billion, net of non-attributed net profit1.
$ 6.2 billion, with an average of 14 a year.
7% and 21.
Brief Comment 1. The company’s 2018 performance was lower than expected, and 2019Q1 began to improve.
In 2018, the company’s revenue was 242.
35 ppm, an increase of 15 in ten years.
1%, but net profit attributable to mother only increased by 2.
3%, reaching 8.
First of all, the first is the company’s comprehensive gross profit margin in 201823.
26%, a slight decrease of 0.
49pct, but increased by 0 due to financial expense ratio.
46pct, the company’s financial expenses reached 2 in 2018.
9.6 billion, a net increase of 1.
36 ppm, resulting in a company net margin of only 3.
74%, anthracene 0.
55pct; Second, the company implemented equity incentives in 2018, and confirmed the cost of equity incentives of 32.12 million yuan, which was 16.60 million yuan more than the original plan.
Overall, the company’s 2018 performance was lower than expected.
In Q1 2019, the company’s net profit attributable to mothers increased by nearly 20%, which is better than the growth rate of revenues, mainly due to the decrease in asset impairment losses by zero.
110,000 yuan, net investment income increased by 0.
23 million US dollars, the budgeted sales expense ratio and management expense ratio (including research and development) are 6 respectively.
71% and 13.
84%, a decrease of 2 respectively.
2pct and 0.
In fact, the company’s accounts receivable continued to grow, and the short-term increase increased, leading to an increase in the financial expense ratio of 0.
55pct, a net increase of 0.
32 ppm, the gross profit margin is 3.
32pct is expected to be related to the decline in product structure and the gross profit margin of fiber optic cables. Although the decline in gross profit margin has decreased significantly, it has improved from the previous quarter.
2. The average price of the three businesses of the company increased steadily, and the performance of the beacon star sky exceeded the eye-catching performance.
In terms of business, the company’s three businesses, communication system equipment, optical fiber and cable, and data network products, achieved double-digit growth, with revenues of 149.
7 billion, 64.
58 ppm and 25.
32 ppm, an average of 13 each year.
4% and 19.
1%, but the gross profit margins have all slightly increased, and decreased by 0.
73 points, 0
41pct and 0.
The subsidiary, Fiberhome, maintained rapid growth and achieved net profit in 20183.
20,000 yuan, an annual increase of 26%.
Overseas income 62.
7.3 billion, with revenue accounting for 25.
88%, an increase of nearly 1 pct compared to 2017, but the growth rate has improved to 19.
56%, and the average growth rate of the company’s overseas revenue in 2016 and 2017 is more than 35%. From the situation we track, the company’s overseas orders are still growing rapidly, which is expected to be related to revenue recognition.
3. Accounts receivable increased significantly, and inventory and sent goods fell for the first time.
In 2018, the company’s bills receivables and accounts receivables reached 83.
870,000 yuan, an increase of 28 in ten years.
66%, accounting for 28% of assets.
71%, an increase of 6.
33pct, 2019Q1 continues to grow to 95.
5.6 billion, 杭州桑拿 accounting for 31 assets.
We expect this to be related to the preferential payment of Chinese operators to ZTE and private enterprises in 2018, and the increase in the proportion of overseas revenue.
The absolute amount of the company’s inventory has fallen for the first time since 2004, reaching 99 in 2018.
2.6 billion, a decrease of 9 from 2017.
24 ppm, of which there was a significant drop of 17 commodities.
2.4 billion, which is the first drop since 2013.
Although the number of issued goods has declined, the proportion of inventory is still as high as 62%, and there is still room for revenue confirmation in the future.
The inventory in Q1 2019 increased slightly, which is normal stocking.
4. 5G is expected to increase quickly, and the company is expected to fully benefit in the future.
On April 22, Huawei released its 2019 first quarter report. As of the end of March 2019, Huawei had broken through 40 5G commercial contracts with leading operators around the world, and more than 70,000 5G base stations have been sent to all parts of the world.
In Huawei’s 2018 annual report, as of the end of February 2019, more than 30 5G commercial contracts have been discontinued, and more than 40,000 5G base stations have been converted and sent to all parts of the world. Following this, Huawei added 10 5G commercial contracts, about 30,000 new 5G base stations have been shipped.
At the “2019 Shanghai 5G Innovation Development Summit” and “China Unicom Global Industry Chain Partner Conference” on April 23, China Unicom announced that it will open 5G trial networks in 40 cities, and then form the latest “7 + 33 + N”5G deployment layout.
On April 28, the People’s Government of Zhejiang Province, China Telecom, China Mobile, China Unicom, and China Tower jointly held a 5G + Action joint press conference in Hangzhou, where the “Opinions of the People’s Government of Zhejiang Province on Accelerating the Development of 5G Industry” was released.
Zhejiang Province clears that by 2022, 80,000 5G base stations will be built to achieve 5G signal coverage above counties and key townships; by 2025, all 5G application areas will be fully covered.
In general, 5G is accelerating in China and overseas. As the main supplier of optical communication equipment, the company has a leading domestic market share, and there are potential expansion opportunities overseas, which will obviously benefit in the future. 5. Profit forecast and rating.
We believe that the company, as a major supplier in the optical communications industry, has a high degree of certainty in the benefits of 5G and has a long-term investment value.
However, considering that in the initial stage of 5G construction of domestic operators in 2018, NSA will be the main factor, and the transition to SA may be gradually implemented in the second half of the year. This will affect the demand for 5G bearer network equipment. As a result, the pressure and price of fiber optic cables in the Chinese market will also be under pressure.The performance of the company caused some pressure.
However, if the company successfully issues convertible bonds, it will reduce financial costs and increase the development potential of overseas markets. It will issue expected progressive recognition of revenue for commodities and replace the company’s equity incentive requirements. We expect the company’s net profit attributable to its mothers to be 2019-2020 respectively.10.
02 ppm, 11.
950,000 yuan, corresponding to PE of 35X, 30X, maintaining the “overweight” level.
6. Risk warning: the company’s 5G orders are less than expected; market competition has intensified, prices have fallen rapidly, affecting gross profit margins; pressure on the optical fiber and cable industry.