Nengke (603859): Intelligent manufacturing enters the harvest period and the performance further accelerates

Nengke (603859): Intelligent manufacturing enters the harvest period and the performance further accelerates
The income and profits continued to increase, and the transitional development entered the harvest period. The company achieved zero operating income in the first quarter of 2019.86 ppm, an increase of 31 in ten years.71%, achieved net profit of RMB 9.22 million, an increase of 61 year-on-year.33%, net profit of RMB 9.02 million deducted from non-attributed mothers, an annual increase of 501.01%.The company adheres to the “smart electrical + intelligent manufacturing” two-wheel drive strategy, gradually increasing its business capabilities and gradually increasing its market influence.  The proportion of smart manufacturing business has further increased, and the revenue of smart manufacturing business in the first quarter of 2019 of companies that have maintained high R & D revenues continued to be about 0.7.4 billion, accounting for more than 80%. Since 2015, the company has begun to deploy smart manufacturing business. Related business capabilities have gradually strengthened, and business development has gradually made breakthroughs. The company’s revenue volume has continued to increase.The company’s gross profit margin was 47 in the first quarter.33%, increase by 1 every year.85 points.The company’s overall expenses in the first quarter were 33.60%, a decrease of 0 every year.96pct, of which 11.38 million yuan for research and development costs, cost of 13.29%, the company continued to invest in research and development, focus on the intelligent manufacturing basic platform and targeted solutions, the company’s core business capabilities have gradually improved, and market competitiveness has been improved.  Mergers and acquisitions to achieve technology market synergy, fund-raising projects to address downstream specific needs. In 2018, the company started to issue shares to acquire Shanghai Lianhong Technology to achieve technology and market synergy.Through mergers and acquisitions, the company expanded the business scope of smart manufacturing services, and at the same time increased the coverage of SMEs. The market competitiveness has been further improved. According to the company’s first quarterly report, the acquisition has been completed and the consolidation is expected to begin in four months.In addition, the company plans to issue shares to raise funds of no more than 300 million U.S. dollars. It is used to invest in products based on digital replacement products, full-life-cycle collaborative platforms and high-end manufacturing assembly system solutions, and to supplement the company’s liquidity.After the research and development was completed, it was quickly applied to further improve the company’s performance. According to the company’s first quarterly report, this work was in refutation of the opinions of the CSRC.  The investment proposal considers the downstream smart manufacturing transformation needs, and the company’s smart manufacturing business is about to enter a period of rapid development.Lianhong started consolidation in April 2019, and it is expected that the company’s net profit attributable to its mother for 2019-2021 will be zero.83, 1.15 and 1.5.2 billion.Corresponding to the current expected PE 苏州桑拿 is 35, 25 and 19 times.Considering that the company’s intelligent manufacturing business is mainly software and its revenue ratio has exceeded 50%, the company’s growth inflection point has been transformed, and we maintain the company’s reasonable value28.The price of 02 yuan / share is unchanged, corresponding to about 42 times the company’s PE in 2019, and the rating of “Buy” is maintained.  Risks indicate that the smart manufacturing business is developing less than expected; market competition is intensifying; accounts receivables are increasing; raising funds is unsuccessful.