Sunsea Intelligent (002313) Semi-annual Report Review: Integrating the IoT “Cloud + End” Ecology to Layout the AIOT Industry
Investment highlights: The company’s interim results have fallen slightly. The company recently released its semi-annual report for 2019 and achieved operating income of approximately 23.
68 ppm, an increase of 29 in ten years.
51%; Net profit attributable to shareholders of listed companies is approximately 4,319.
400,000 yuan, down 12 every year.
11%; the net profit of alternative non-recurring gains and losses attributable to shareholders of the listed company is approximately 3472.
30,000 yuan, down 18 every year.
82%; basic profit income is 0.
The company’s first half profit was in line with market expectations.
The adjustment of the company’s business structure was completed, and the growth of the Internet of Things business was obvious. In the first half of this year, thanks to the rapid growth of the Internet of Things business, the company’s main revenue and costs maintained a synchronous increase of about 30%, and the overall gross profit rate was 16.
8%, down by 1 every year.
In terms of expenses, the sales expenses increased by 27%, the management expenses remained the same as the previous period, and the research and development expenses were 64.53 million, an increase of 44% each year. The main reason was that the company increased the research and development expenses of AI intelligent products and new module products, and the financial expenses increased by 133%.Mainly due to the increase in interest on bank borrowings.
As the industry settlement is expected to affect the company’s current operating cash flow of -59.18 million.
As for the specific business of the company, the company’s main business currently includes the Internet of Things business and communication service business.
The main products and services of the IoT business include IoT large and medium-sized platforms, intelligent communication equipment, intelligent terminals and IoT solutions, which are mainly used in public utilities, smart cities, transportation and logistics, connected cars, and smart homes.
In the first half of the year, the company’s IoT business revenue was 13.
USD 5.6 billion, an annual increase of 137%, the business accounted for 57% of revenue, the relative proportion increased by 25 percentages, the industry gross margin reached 14.
8%, an increase of at least 3 percentage points; the main products and services of the communications service business include wired broadband, data centers, wireless stations, small base stations and communications engineering services, mainly for the three major domestic telecommunications operators, communications equipment manufacturers andThe end user provides a complete set of solutions for physical connection, wiring, protection and comprehensive wiring of the communication network.
In the first half of the year, the company’s communications business income was 10.
1.2 billion US dollars, a year-on-year decrease of 18%, the business accounted for 43% of revenue, the relative proportion fell by 15 units, the industry gross margin was 19%, but fell by 1.
The change of the company’s business proportion is mainly based on the company’s business strategy tilting towards the IoT field. The completion of the transformation to the IoT company through mergers and acquisitions has led to an increase in IoT product revenue, while the decline in the communication network equipment product business is the response of the company to operators.The impact of declining investment and fierce price competition in the bidding model has streamlined product lines and adjusted product strategies.
Therefore, the Internet of Things business will become the company’s main development direction in the next two years.
Seize the development opportunities of the Internet of Things industry and comprehensively deploy the Internet of Things industry chain. Mobile communication networks are developing from communication between people to data exchange between people and things, things and things.
According to the plan of the Ministry of Industry and Information Technology, by 2020, the scale of the Internet of Things industry will exceed 1 per year.
According to GSMA forecast data, the number of global Internet of Things terminal receptions will reach 10 billion levels by 2025.
At the same time, the commercial development of 5G technology drives the rapid development of personal and industry mobile applications. 5G networks provide users with flexible, reliable and efficient connections, providing a broader application prospect for the smart Internet of Things, promoting consumer Internet of Things, smart city Internet of Things and production.The rapid development of application areas such as the sexual Internet of Things.
According to the forecast of the ICT Institute, telecom operators will invest more than 2200 trillion in 5G network equipment in 2020, and spending on 5G equipment in various industries and fields will exceed 520 billion US dollars in 2030.
The company has seen the broad prospects of the Internet of Things application market in the 5G era, positioning itself as an emerging intelligent Internet of Things (AIoT) company, with the goal of becoming a leader in the domestic artificial intelligence Internet of Things.Xinxuntong and Longshang Technology, using modules as the fulcrum, began to fully penetrate into the field of IoT, and then invested in the world’s leading IoT cloud platform company, the United States of America Ella, to establish a joint venture company in China and quickly own the leading IoTCloud platform technology and operational capabilities.
Based on the “cloud + end” technology architecture, layout of three major product lines: large, medium and large platforms, AIOT smart devices and smart terminals, has successively launched 5G modules, AI neural hub platforms and various types of smart terminals, smart devices and other innovative products.And obtain applications in multiple cities such as smart cities, smart suites, smart logistics.
In terms of product innovation, the company launched a 5G module at this year’s MWC conference and released a 5G module for real network testing in June. It has cooperated with a number of industry application companies to jointly launch 5G CPE (home gateway) and 5G industry.5G products such as routers, 5G gateways, 5G small base stations, etc. In software technology, the company released the first AI city nerve center-AI perception platform, supporting the integration of equipment, data, and applications with new technologies of large, medium and large platforms.It also integrates various downstream intelligent terminals, connects systems, and shares applications, and provides unified and enhanced support through AI smart boxes.
Play a core supporting role in multi-level scenarios such as smart cities, parks, communities, 都市夜网 and buildings.
At the same time, the company gradually implemented the Internet of Things to realize the intelligent upgrading and transformation of traditional industries. Through the intelligent transformation of traditional communication equipment products, it has successively introduced smart products such as smart ETC cabinets, smart street lights, and intelligent optical interlocking.In order to improve the market competitiveness of the company’s communication products; continuously expand the application scenarios of smart terminal equipment, the company independently developed or jointly developed a number of direct-to-consumer smart terminal products, such as smart smoke sensors, smart manhole covers, and smart door locks.Intelligent water meters, intelligent management equipment for electric vehicles, 5G drones, 5西安桑拿G robots, etc. complete the industrial chain.
With the introduction of the early AIOT concept, the company continued to make efforts in the field of AIOT. It has developed AI smart boxes, AI video edge computing terminals, and AI vehicle edge computing terminals. The AI smart box is the core foundation for collecting and processing large amounts of data.Added to the cloud platform database combined with AI machine learning to improve the behavior feature database.
In terms of industry applications, the company cooperated with China Telecom Tianyi Internet of Things company’s smart smoke detection SaaS platform has been launched, providing Guangdong Unicom with a series of Internet of Things services such as smart buildings, smart smoke detection, and smart transportation.
The profit forecast considers the comprehensive and good layout of the company’s business in the Internet of Things. The business structure has basically completed the transformation to the Internet of Things field. The company will gradually transition to the rapid development of the Internet of Things industry in the next two years to achieve rapid business growth. We expect the company in 2019?2021 revenue will reach 64.
09 billion, 86.
5.2 billion and 112.
48 ppm, corresponding to a return to net profit of 1.
01 billion, 2.
01 billion and 3.
Give the company an “overweight” rating.
Risk reminder: The development of the Internet of Things industry is less than expected, and the company’s communications products continue to decline in gross profit.