China-Singapore Sec (002912) Quick Review of Important Events: Prosperity Upward, Earnings Exceed Expectations, Upgrade Rating

Matters: Recently, Sino-Singapore 厦门夜网 released the 2019 performance forecast: profit 26618.


770,000, an annual increase of 30% -60%.

Guoxin Communications’ view: The company’s 2019 performance forecast is valued at 300 million, exceeding our previous estimate of 2.

600 million, exceeding expectations.

We believe that this is mainly the result of faster business order execution, industry customer expansion, and effective fee control.

The company’s information security field began to improve in the second half of 2019, and large orders may land in 2020, and the company is expected to fully benefit.

We are optimistic about the company’s long-term development.
The profit in 2021 is 2.



9 trillion, corresponding to PE50, 36, 25 times, raised to the “buy” level.

Comment: The company’s performance is obvious, and the fourth quarter of 2019’s performance exceeded expectations. The company’s business model is a large order system. Due to the effect of the government bidding rhythm, orders are mainly executed in the second half of the year, and revenue is confirmed.May fluctuate axially.

Calculated based on the median profit of 300 million in three years, the company’s quarterly profit and growth rate are shown below.

According to the situation of the past two years, the profit of Q4 will generally be less than Q3, but the net profit of Q4 in 2019 is higher than Q3, which is slightly higher than expected.

In our opinion, the company’s Q4 performance exceeded expectations mainly due to: breakthroughs in information security solutions in other industries;

The prosperity of information security and the rapid growth of 5G stimulus traffic have helped the company to develop the network visualization construction as a government information security protection expenditure for a long period of time, which has a certain volatility between years.

Due to the adjustment of related organizations and the 70-year military parade in 2019, government procurement has been delayed, and demand has been suppressed to some extent, and it is expected to be released in 2020.

In fact, Mayer Berke, which is in the same field as the company, has also exceeded expectations in Q4 2019, and will certainly represent a recovery in demand representing the industry.

In 2020, the full-scale commercialization of 5G will increase the user’s lateral traffic, which will force the expansion of the backbone network. The company’s introduction of core backbone network and bearer network inverter equipment will help to gradually increase upgrades and stimulate corresponding purchases.It is expected to continue to increase vice growth.

As an important transformation of data infrastructure, visualization will fully benefit from the big logic of traffic growth.

An intense equity plan was released, optimistic about the company’s long-term development and business scale, and raised to a “buy” rating. The company issued a share incentive plan in December 2019. It took out 3% of its shares to motivate 378 employees and set the targetBy 2022, it demonstrates the company’s confidence in continued steady growth in the next three years.

We are optimistic about the company’s long-term development.
The profit in 2021 is 2.



9 trillion, corresponding to PE 50, 36, 25 times, raised to the “buy” level.

Risk warning: downstream orders fall short of expected risk; new business gross profit margin reduces risk; fee control does not meet expected risk.