Mind Control (603508) 2019 First Quarterly Report Review: Q1 Performance Increases and Increases LKJ Equipment Type 15 First Tender

Mind Control (603508) 2019 First Quarterly Report Review: Q1 Performance Increases and Increases LKJ Equipment Type 15 First Tender

Matters: The company released the first quarter report of 2019 to achieve operating income3.

99 ‰, an increase of 151 in ten years.

05%; realize net profit attributable to shareholders of listed companies.

970,000 yuan, an increase of 1119 in ten years.

47%, net profit after deduction 1

3.2 billion, an increase of 233 in ten years.

44%.

Comment: Lanxin Technology consolidated its balance sheet, with significant growth in operating income and net profit, and improved profitability.

The company acquired Lanxin Technology through multiple transactions and completed the transfer of Lanxin Technology’s assets on December 19, 2018.

Realized operating income in the first quarter of 20193.

99 ‰, an increase of 151 in ten years.

05%, mainly due to: (1) Lanxin’s complete consolidation; (2) the company’s sales of LKJ systems and aircraft security systems increased during the reporting period.

Net profit attributable to shareholders of listed companies6.

970,000 yuan, an increase of 1119 in ten years.

47%, mainly due to: (1) The company acquired Lanxin twice in two transactions, re-measured the fair value of the original equity held on the date of purchase, and recognized investment income of approximately 5.

59 ppm; (2) Profitability has improved, and the company’s comprehensive gross profit margin was 65 during the reporting period.

31%, an increase of 8.
.

41 averages, net profit after deduction 1

3.2 billion.

The first tender of LKJ equipment 15 is expected to achieve rapid growth in the company’s operating income.

On April 24, 2019, during the bidding and procurement of the “LKJ Equipment Update” project of China Railway Zhengzhou Bureau Group Co., Ltd., the announced project content included 96 LKJ equipment 2000 units and 5 LKJ equipment 15 units.

This is the first domestic bidding for LKJ equipment 15 type. Although the number of long-distance LKJ equipment 2000 type, it indicates that LKJ equipment has entered the stage of replacement. In the future, LKJ equipment 15 type will gradually replace LKJ equipment 2000 type.

As a leading company in the LKJ equipment industry, the market share of LKJ equipment has increased year by year. Last year, the company’s next-generation product, the LKJ-15S train operation monitoring system, has passed CRCC certification.Operating income is expected to achieve rapid growth.

Buy back the shares and have confidence in future development.

In February this year, the company announced that the total amount of funds to be repurchased does not exceed RMB 1.

00 ppm, not exceeding RMB 2.

One million yuan.

The repurchased shares account for approximately 16,000 of the company’s current total share capital.

1 million shares.

25%, the purpose is to use shares for employee stock ownership plans or equity incentives or to replace the reduction of registered capital in accordance with the law.

The Air Force Company has completed the repurchase, which actually repurchased 2,376,687 shares of the company, accounting for 1 of the company’s total share capital.

25%, with a total of 10,002 of funds used.

980,000 yuan.

This reflects the company’s affirmation of its inherent value and confidence in the company’s future development.

Earnings forecasts, estimates and investment ratings.

Based on the investment income brought by the consolidated blue letter, we raised the company’s net profit in 2019 to 8.

8.6 billion, maintaining the predicted net profit of 500 million / 6 in 2020-2021.
2 billion, corresponding to 4 EPS.
10/2.

31/2.

79 yuan, corresponding to PE is 11/20/17 times, excluding the impact of investment returns in 2019, giving Mind Control an estimate of 30 times in 2019, maintaining a target price of 54.

3 yuan, maintain the “recommended” level.

Risk warning: Railway investment is less than expected, and the promotion of new generation products 都市夜网 is less than expected.