Hytera (002583): Significant global expansion and continuous improvement in refined operations

Hytera (002583): Significant global expansion and continuous improvement in refined operations

Event: On July 14, the company released the 2019 semi-annual performance forecast. The company is expected to realize a net profit of 20-30 million yuan, an annual increase of 154.

34% -281.

50%, performance is in line with expectations.

  Comments: 1. The second quarter results began to release, optimistic about the company’s growth space in the second half of the year. According to the performance forecast, the company is expected to achieve a median net profit of 25 million yuan attributable to mothers in the first half of 2019, an increase of 217.

9%, it is expected that in the second quarter of 2019, the net profit attributable to mothers will be 1.


29.8 billion, an annual increase of 7.

2% -16.

1%, median net profit attributable to mother 1.

24.8 billion, a 10-year increase of 11.

At 6%, the growth momentum of the company’s performance mainly comes from two aspects: 1) significant integration and synergy effects, continuous development of global business, and further optimization of the product structure; 2) continued refinement of operations, effective management of expenses, and continuous improvement in operating cash flow.

The short-term profit increase in the first quarter of this year overlaps slightly, mainly because the Q1 2018 revenue includes 3 carried forward at the end of 2017.

500 million revenue, excluding the carry-over effect, the company’s first quarter revenue increased by 25.


  We judge that the company’s performance will be gradually released starting from the second quarter, and the second half of the year will still maintain a high growth rate.

  2. Overseas business develops smoothly. The integration effect of Sepura’s M & A highlights that Hytera has integrated in various aspects after the acquisition of Celsun, so as to enhance the company’s overall competitiveness in the global market. Sepura’s public safety market in Europe hasThere is potential customer stickiness.

In the Latin American region, the company’s advantages and the integration of Cypress’s market channels, product solutions, and language and culture have broken through the dilemma of Latin American market expansion. This year, it has won a number of major projects in Brazil, Mexico, and crops. Latin AmericaIt is becoming an important growth point for Hytera’s future performance.

The company has now completed a number of orders in Latin America, and the revenue recognition will be realized in the second half of the year. This will translate into the return of Motorola’s business focus to the United States, the company’s efforts to continue to promote its share in emerging markets, and the continued development of the global market share logic. 3The efficiency of refined operations is significant, and the cash flow situation has improved significantly. Starting from the end of 2018, the company continued to optimize its resource allocation capabilities through the implementation of management and decomposition projects such as CRM and ERP. The effect of cost control and efficiency was significant, and it gradually shifted from an extensive expansion strategy.In order to refine the operation, in terms of specific measures, the company actively activated its inventory by strengthening the management of project repayments and cost control, and realized operating net cash flow in the first quarter.

At 09 trillion, the cash flow situation has continued to improve. It is expected that the cash flow will continue to be maintained in the second quarter, and gradually the cash flow is expected to improve further.

In addition, the company expects to issue bonds that do not exceed RMB 10 million (including 1 billion US dollars) in public, and the maturity period is no more than 5 years (including 5 years). Long-term debts can be used to replace short-term debts to improve the company’s financial structure and reduce its financial risks.
Matsushita’s cash flow is gradually picking up. It is expected that the business will gradually expand and the company’s cash flow situation will further transform.

  4. The distributed application of PDT at 800MHz is expected to bring new results to the company. In June this year, the Ministry of Industry and Information Technology added a digital conversion communication system based on PDT (dedicated digital conversion communication system) technology using 800MHz frequency, based on DEN, GoTa and GT800 technologies.The architecture of the digital integrated communication system will no longer plan to use the 800MHz 北京夜生活网 frequency band.

Hytera reaches nearly 70% of the domestic public security PDT private network market. At present, nearly half of the domestic public security private network is being constructed. In-depth coverage, network expansion and the need for TETRA system replacement in some provinces are expected to bring new growth momentum to the company’s PDT business.The company actively leads the formulation of standards for some special industries and actively cooperates with the key design of the informatization construction of the newly established emergency management department. The new applications will bring a certain amount of business increase to the company.

Overall, there is still a potential life cycle for PDT services.

  5. The new cycle of private network broadband is about to start, and the company’s progress is the first to benefit. Maintaining the “Strongly Recommended-A” rating. As one of the global private network communication leaders, the company has always attached great importance to the development trend of private network transition from broadband to narrowband and insisted on independentThe R & D layout is integrated with wide and narrow. At present, the company has successively launched new types of products such as broadband expansion, multi-mode terminals, command and dispatch, and ad hoc network communications. Experiments and small-scale networking have begun in various places. The broadband of private networks is the industry’s determination.This trend is expected to bring several times the growth of the market size. The company ‘s wide and narrowband convergence terminals are expected to land first this year. The system and solutions will gradually begin to increase in 2020. When the domestic private network broadband market is gradually launched, the company is expected to welcomeCome a new round of high growth.

It is expected that the net profit attributable to mothers for 2019-2021 will be 7, respectively.

10 billion, 9.

01 billion, 11.

7.8 billion yuan, corresponding to 22 PE in 2019-2021.

3, 17.

3 and 13.

3 times, maintaining “strongly recommended-A” level.

  Risk Warning: The business development is lower than expected, and the cost control is lower than expected.