In the first half of the year, the company's performance was high, and the Beidou market is expected to be further opened. According to the previous company's 2018 semi-annual performance forecast, the company's first-half results achieved a net profit of 50,067,200 yuan -58,482,200 yuan, a year-on-year increase of 110%-140%. On the one hand, the rapid growth was due to the rapid growth of revenue. The revenue growth of the core business Beidou+ precision positioning equipment exceeded 20%, and the growth of Beidou+ industry application software and solutions and Beidou+ spatio-temporal data business exceeded 300%; On the other hand, the use of Beidou high-precision board independently developed by the company has further increased, which has led to an increase in gross profit margin. Since the beginning of this year, the Beidou satellite has been in the stage of intensive launch. Up to now, China has launched 8 Beidou-3 satellites to 2018. At the end of the year, about 18 Beidou-3 satellites will be launched and the coverage of the area along the 'Belt and Road' will be completed. According to the White Paper on Development of the 2018 China Satellite Navigation and Location Service Industry, the overall output value of China's satellite navigation and location service industry in 2017 has been It reached 255 billion yuan, an increase of 20.4% compared with 2016, and maintained rapid growth. The core output value of the industry accounted for 35.4%, reaching 90.2 billion yuan. The contribution rate of Beidou to the core output value of the industry has reached 80%. We believe that with the gradual advancement of the Beidou No.3 network, the domestic Beidou navigation market space is expected to open quickly, and currently in various fields of transportation, maritime, electric power and other industries. The promotion and application of domestic Beidou terminal products has accumulated more than 40 million units/set, and the total number of social users of terminal products using Beidou compatible chips, including smart phones, is close to 500 million units/set. At the same time, Beidou is a satellite navigation system independently developed by China. In the context of the competition between China and the United States, its importance will be more prominent, and it is expected to receive sustained policy support, and its long-term development is worth looking forward to.
Earnings Forecast and Rating: We expect the company's operating income from December 20 to 2020 to be 12.97, 15.81, and 19.14 billion yuan respectively. The net profit attributable to the parent company is 0.87, 1.09, and 139 million yuan respectively. Calculated earnings per share based on the latest share capital of 447 million shares. They are 0.19, 0.25, and 0.31 yuan respectively, and the latest stock price is 78, 62, and 49 times respectively, maintaining the 'overweight' rating.