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Donggang (002117): Long-term, short-term pressure on traditional business needs, new business long-term development prospects

Donggang (002117): Long-term, short-term pressure on traditional business needs, new business long-term development prospects

This report reads: The company released the third quarter report of 2019, and the performance exceeded expectations.

The demand for printing business has slowed down, and changes in the bidding and settlement cycle of lottery business in new channels have affected the growth rate.

In the long run, the company has been cultivating financial and taxation financial customers, and has a bright future for new business development.

Investment Highlights: Raise target price to 13.

93 yuan, maintaining the overweight rating.

The company released the third quarter report of 2019, and the performance growth rate exceeded expectations.

Considering the impact of the slowing of the company’s printing business demand and the changes in the bidding and settlement cycle of the new channel lottery business, the company is reduced in 2019?
EPS to 0 in 2021.

50 (-0.

04) / 0.

57 (-0.

06) / 0.

65 (-0.

07) Yuan, referring to the industry’s 28 times PE for the company in 2019, and raised the target price to 13.

93 yuan to maintain the overweight level.

Performance growth was lower than expected, and profitability continued to improve.

The company achieved revenue 11 in the first three quarters of 2019.

6.6 billion, an increase of 0.

08%, achieving net profit attributable to mother 2.

0.6 billion, an increase of 5.

20%, with a combined gross profit margin of 41.

13%, increase by 1 every year.

29pct, net interest rate 17.

74%, an increase of 0 a year.

95 points.

Among them, Q3 single quarter revenue fell by 3 as well.

33%, net profit attributable to mother increased by 0.

18%, gross margin 44.

46%, an increase of 4 from the previous quarter.

01pct, net interest rate 20.

13%, an increase of 2 from the previous quarter.

57 points.

The printing business was affected by the slowing down of demand, and changes in the lottery bidding and settlement cycle of new channels affected the growth rate of performance.

The company’s printing business was affected by unfavorable factors such as slowing market demand, and its revenue and profit levels were lower than expected.

The 四川耍耍网 company timely adjusted its product business structure according to market conditions and shut down its low-margin product line.

The smart cards of overlay products maintained better growth rate, and the revenue of technical service business improved and declined, but the profit level improved significantly. The customer base of file storage business service continued to expand. The new channel lottery business changed through the bidding and settlement cycle.Income has improved and declined.

Deeply cultivate financial and taxation financial customers, and the prospects for new business development are broad.
The company continued to deepen its financial and taxation financial customers, and the new extension business advanced in an orderly manner. The scale advantage of the file storage business expanded, and the profit potential met the inflection point. After the adjustment of the bidding cycle of the new channel lottery business, it continued to benefit from the accelerated launch of self-service lottery terminals.
Risk reminder: the acceleration of the economic downturn leads to changes in the growth rate of traditional businesses, and the price of raw materials changes significantly