Zhongjia Bochuang (000889) Annual Report 2018 Review: Acquiring Jiahua’s Outstanding Performance and Grabbing Location Resources

Zhongjia Bochuang (000889) Annual Report 2018 Review: Acquiring Jiahua’s Outstanding Performance and Grabbing Location Resources

Guide to this report: The company released its annual report, and Zhongjia Bochuang’s 2018 operating income was 30.

310,000 yuan, a substantial increase of more than 40% each year.

The performance promise of M & A Jiahua Information was fulfilled more than expected. In the construction of 5G in 2019, the company’s site resource pool project will help benefit.

Investment Highlights: Maintain “Overweight” rating and target price of 18 yuan remains unchanged.

The company released its 2018 annual report and achieved net profit in 20182.

53 trillion, EPS is 0.

38 yuan, initially due to the decline 深圳桑拿网 in the performance of the operator’s comprehensive maintenance service procurement. The value-added telecommunications business income was affected by the channel fees, and the gross profit margin decreased.

Taking into account the acceleration of 5G commercialization in 2019 and 2020 and the increase in operator expenditures, the EPS for 2019-2021 is expected to be 0.

42 yuan (down 30%), 0.

52 (repair 28.

8%), 0.

59 yuan, this estimate is based on the expansion of share capital after mergers and acquisitions.

With reference to the assessment of comparable companies, Zhongjia Bochuang has been given a 43x valuation in 2019, corresponding to a target price of 18 yuan, which remains unchanged and maintains an “overweight” rating.

K. Wah has exceeded its commitment on acquisition performance, and the three major industries have achieved coordinated development: The company’s 2018 operating income has increased significantly, mainly due to consolidation and information transmission and communication maintenance services.

The company’s three major business developments will continue to expand in the future, and it will further expand R & D investment and have valuable transformation experience. In the future, the business scope will continue to expand and its competitive advantage will continue to grow. It is expected that the company’s performance in 2019 will continue to grow at a relatively high rate.

Layout and grab site resources to prepare for 5G commercial landing: The edge computing room is small in size, bearing relatively small standard relative errors such as earthquake resistance, and adopts decentralization, so it is more suitable for deployment on small base stations.

The company is actively deploying the “5G site resource pool” project across the country to provide related resources and experience. It is expected that it will benefit significantly when the future edge computing application is implemented.

Catalysts: Increasing the volume of corporate SMS services; increasing network maintenance expenditures based on 5G construction operators; financial expansion services are more common.

Risk warning: The gross profit margin of the SMS business drops; 5G construction is less than expected; the market expansion of financial 四川耍耍网 services outsourcing business is less than expected; and the risk of goodwill impairment.