Hytera (002583): Incentive indicators have a high probability of achievement and guide the future

Hytera (002583): Incentive indicators have a high probability of achievement and guide the future

The first phase of the expected stock incentive plan announced by the event company (revised draft), intends to grant incentives to no more than 3,631 additional stocks.

460,000 shares, of which 3,086 was awarded for the first time.

740,000 shares, expected 544.

720,000 shares.

The three evaluation indicators for lifting the sales restriction period, the first is that the net profit in 2018 is not less than 6 trillion and the net profit in 2019 is not less than 7.

800 million US dollars, or 2018 and 2019 total net profit of not less than 1.4 billion US dollars, or based on 2018, the growth rate of operating income in 2019 is not less than 15%, and the maximum non-net profit; The second is that the net profit in 2020 is not less than 1 billion US dollars, or based on 2018, the operating income increase in 2020 is not less than 30%, and the non-net profit deduction is not less than 60%;For 2021 net profit profit is not less than 12.

500 million US dollars, or based on 2018, the operating income in 2021 will be reduced by not less than 45%, and the non-net profit after deduction will gradually be not less than 90%.

  Brief Comment 1. The stock incentive appraisal index is adjusted, and the performance achieves a probability increase.

  The company adjusted the evaluation indicators of the stock incentive plan. In addition to the previous requirements for the evaluation of specific values of net profit, the company added the conditions for the exercise of revenue and non-net profit after the growth rate was reached.Revenue is not less than 79.

74, 90.

14, 100.

54 ppm, deducting non-net profit of not less than 4.

07, 5.

02, 5.

9.6 billion.

We estimate that the increase in the probability error in the realization of the growth rate of revenue and net profit this time compared with the previous higher exercise conditions.

  2. The company’s net profit situation has improved and its profit has maintained steady growth.

  As the company continues to make breakthroughs in the development of overseas markets, its capacity to operate large projects continues to increase, and its business scale grows rapidly.

At the same time, the company vigorously promoted refined management and optimized the operation and management model, and the sales expense ratio and management expense ratio were significantly improved.

In the first three quarters of 2019, net profit attributable to mothers was 1.

At 09 ppm, the decrease in net profit was mainly due to the fact that some litigation costs this year were confirmed in the third quarter and 2018 were confirmed in the second and fourth quarters.

In general, after the company entered 2019, its operating conditions have improved significantly. Cash flows from operating activities have continued to flow in, profits have continued to grow, and the net profit performance indicator is expected to achieve probability.

  3. The new era of wideband and narrowband integrated private networks drives the rapid development of the industry.

  IMS predicts that the global private network communications market will reach 161.6 billion U.S. dollars in 2020, while the domestic private network communications market will reach 23 billion U.S. dollars in 2019, and the growth rate will remain around 15% in the next five years.

We believe that in the next 7 years, the private network market will rely on integration of broadband and narrowband to accelerate deployment and achieve sustained and rapid growth in market size.

Hytera has been deploying broadband and narrowband fusion products for many years. The company is expected to follow the industry trend and accept the development bonus of the industry.

The company has three product lines of private network: PDT private network products are in an advantageous position in the domestic public security market,上海夜网论坛 occupying 80% +; DMR is well-established in emerging areas of private networks such as Africa, Latin America, and the Belt and Road; and Tetra technology and brands are acquired through outbound M & A, Preliminary expansion of high-end markets such as Europe and the United States.

With the global public security situation becoming severe, all countries are actively carrying out private network communications, the company has rich overseas sales experience, and mergers and acquisitions are entering the harvest period.

  4. Maintain “Buy” rating on the benchmark Motorola.

  Hytera is committed to becoming the world’s top manufacturer of private network communications equipment. It challenges the world’s leading Motorola system in the fields of technology, products and scale.

In terms of R & D funding, Hytera continues to maintain high R & D investment, and always maintains R & D investment accounting for more than 11% of revenue. Hi-Tech’s high R & D investment will inject more vitality into Hytera’s future products and services.

We estimate that the company’s net profit attributable to mothers in 2019, 2020 and 2021 will be 5 respectively.

94, 8.

34, 10.

500 million, corresponding PE is 28X, 20X, 16X, size “buy” grade.

  5. Risk warning.

  The company’s revenue and net profit indicators were lower than expected; the decline in domestic fiscal expenditure caused the private network investment to fall short of expectations; the company’s internal market expansion fell short of expectations; changes in the international environment affected the company’s overseas market expansion.