Hikvision (002415): Weak market continues to maintain R & D investment to consolidate the layout of AI application areas
The revenue growth was less than expected, and the expansion was based on long-term continuity, maintaining the “Buy” rating. Hikvision also announced 2018 and 2019 first quarter financial reports, with 2018 operating income of 498.
3.7 billion, 113 net profit 合肥夜网attributable to mother.
5.3 billion, after deducting non-return to mother’s net profit 109.
8.3 billion, an increase of 18 over the previous year.
Q1 2018 revenue was 99.
4.2 billion, net profit attributable to mother 15.
3.6 billion, net profit after deduction to mother.
8.3 billion, respectively, an increase of 6 from the previous year.
The 2018 annual report is generally in line with expectations and has a steady growth; but due to the influence of domestic economic and overseas non-market factors, the company’s revenue growth has declined quarter by quarter since the second quarter of 2018; as the revenue growth in the first quarter of 2019 exceeded expectations, HaikangBased on the long-term, continue to maintain high research and development investment, the impact of costs, bringing the net profit after deduction is higher than expected, maintaining the “buy” level.
Affected by internal macro factors, Haikang’s revenue growth has accelerated, but its gross profit margin and cash flow performance have been beautiful.Starting in 2018, domestic deleveraging and complex overseas macro environments have made it a reasonable choice for Haikang to sacrifice short-term revenue growth to ensureIncome and profit health.
In 2018Q1 and 2019Q1 of Haikang, the single quarter revenue exceeded the growth rate by 32.
95% / 22.
41% / 14.
58% / 13.
11% / 6.
17% quarterly crude oil.
However, gross profit margin and cash flow are very healthy, with gross profit margins of 44 in 2017, 2018 and 2019.
00% / 44.
85% / 44.
82%, the gross profit margin is stable at a certain level, while the company’s operating cash flow in 2018 increased by ten years each year23.
61%, better than revenue growth.
Under the weak market, R & D investment continued to be maintained, and at the same time, the organizational structure was changed to be closer to the market and users. Under the weak market in 2018, Haikang established a long-term perspective and continued to maintain R & D investment.
8.3 billion, an annual increase of 40.
34%, R & D expense ratio 8.
In addition to traditional products and technologies, Haikang also accelerated the distributed research and development of AI Cloud, the AI Cloud computing architecture + the data-integrated data architecture, and continuously consolidated the layout of AI intelligence, big data, and application areas.
At the same time, under the pre-judgment of AI development, customer needs change. In order to better adapt to customer needs and improve internal operation efficiency, Hikvision opened up industry groups in 2018 and established PBG, EBG, and SMBG3 business groups to effectively coordinate internal resources.Targeted market coverage based on customer differences.
The new robotics business in the innovation business started to profit, and the overall innovation business maintained high growth.In 2018, the fluorite business continued to be profitable, and at the same time, the innovation business in the Haikang robotics business achieved profit.The market has made breakthrough investment and promotion.
From the perspective of revenue, fluorite increased by 50 in 2018.
07%. Except for fluorite, the growth of innovative business increased by 87.
AI Cloud computing architecture + material-integrated data architecture consolidates the AI layout, maintains a “buy” rating, and is optimistic about Hikvision’s solid accumulation. It does not forget its original intention in a complex environment to ensure healthy revenue and profits, while maintaining R & D, gradually organizing the structure, and cooperating with internal resourcesTo improve performance.
At the same time, the AI Cloud computing architecture + data-integrated data architecture continues to consolidate the layout of AI intelligence, big data, and application areas.Against the backdrop of a stable macroeconomic start in 2019Q1, we estimate that Haikang’s net profit attributable to mothers for the year 19-21 will be 134.
8.5 billion, with an EPS of 1.
44\1.74\2.11 yuan,北京养生会所 comparable companies’ average 2019 estimate is 23.
08 times, taking into account the technological leadership brought by the continuous high R & D introduction of Haikang, giving Haikang a PE estimate of 25-27 times in 2019 (a certain estimated premium) and a target price of 36.
88. Maintain “Buy” rating.
Risk warning: Macroeconomic risks, intensified overseas competition, and new business progress exceeding expectations.