ZTE (000063): Changes in profit after deducting non-tax in the single quarter of the “crowding of water” on the asset side

ZTE (000063): Changes in profit after deducting non-tax in the single quarter of the “crowding of water” on the asset side

1.

Event: The company deducted non-net profit after the replacement in the third quarter, and the asset disposal income exceeded 2.6 billion: the company achieved revenue of 642 in the first three quarters.

41 ppm, an increase of 9 in ten years.

32%; Net profit 41.

270,000 yuan, an increase of 156 in ten years.

86%, net profit after deduction 7

100,000 yuan.

Single third quarter revenue was 196.

30,000 yuan, net profit 26.

5.7 billion, an annual increase of 445.

The net profit after deduction of 84% is only 9803.

20,000 yuan, down 18 every year.

61%. The growth of the company’s third quarter net profit was mainly 武汉夜生活网 due to the increase in the income from the operation rights of the properties commissioned by the Shenzhen Bay Headquarters Base.

2.

Single quarter revenue growth, 5G commercial initial orders extended, 4G capacity expansion effect faded, gross profit margin changes: the company’s single third quarter revenue shifted, an increase of 1%.

55%, pressure on revenue growth: We believe that 5G is currently in the early stages of business order changes, and the end of 4G capacity expansion is under pressure for the company’s operator revenue growth.

In addition, the company’s initial 4G capacity expansion and chain reduction caused by the chain’s initial chain reduction were lower.

3. R & D expense ratio is still high, R & D capitalization is reduced, management expenses and financial expenses remain stable: the 都市夜网 company ‘s R & D expense ratio remained at about 15% in the third quarter, the R & D capitalization ratio continued to decline, and the R & D expense scale increased significantly.Roughly, the R & D capitalization expenditure of the company in Q1 from 2018 to 2019 continued to increase rapidly. After Q2 2019, there has been a significant decline, which has negatively driven the company’s current profit growth.

4.

Accounts receivable overall decreased but credit impairment increased, inventory size continued to expand and price loss increased: Although the overall scale of the company’s receivables decreased slightly in the third quarter, the overall credit impairment scale remained high. We judge the company in theThe account receivable accrual has undergone radicalization treatment; the scale of inventories has continued to expand, and the loss of inventory depreciation has continued to expand.

5,

The operating cash flow continued to expand, short debt decreased, and long-term debt increased, reducing the pressure on short-term companies to repay debts. The company’s operating cash flow continued to expand in the third quarter. The company’s debt effectively reduced short-term debt pressure by replacing short-term debt with long-term debt.Conducive to the company’s long-term research and development expansion and expansion.

Profit forecast and estimation: Maintain the company’s profit forecast unchanged, corresponding to the current price of PE28x, 24x, 19x. Considering that the internal 5G construction has entered the deployment stage, it is estimated to fall back to normal levels and maintain a “neutral” rating.

Risk warning: Sino-U.S. Trade war risks; additional issuances will continue to strain cash flow as scheduled; 5G commercial progress is less than expected.