Zhongxin Sec (002912): Knee Verification, Interim Report Improves Traffic Driven 5G Post-cycle Target

Zhongxin Sec (002912): Knee Verification, Interim Report Improves Traffic Driven 5G Post-cycle Target

Investment Highlights: Event: The company announced its 2019 semi-annual report with 19H1 revenue3.

3.4 billion (+26.

12%), deducting non-net profit of 0.

6.4 billion (+12.

36%); Q2 single quarter revenue 2.

3.7 billion (+35.

33%), deducting non-net profit of 0.

710,000 yuan (+29.


19北京夜网 H1 performance was in line with previous expectations, Q2 performance inflection point was verified, and there was no increase in growth.

The Q1 company is temporarily affected by the order confirmation. The growth rate of revenue and non-net profit deduction is 8 respectively.

21%, -405.

52%; but Q2 revenue, deducting non-net profit growth rate reversed, respectively, a high increase of 35.

33%, 29.


Excluding the 692 million impairment impact of the Maike network impairment provision of the associate company, H1’s net profit growth rate is more than 24%, and we expect the company’s growth in the second half of the year to accelerate quarterly.

Cash flow from Q2 single-quarter operating activities is positive, and H2 is expected to increase quarter by quarter.

The company’s Q2 net cash flow from operating activities was 0.

1.1 billion, ranked 0 at Q1.

The 16 trillion optimization is obvious.

The company’s single-quarter operating cash flow in “17-18” was “low before and then high”, and each quarter of 2017 was -0.




54 ppm, -0 for each quarter of 18 years.




4.9 billion yuan.

In addition, the company’s historical cash flow remains unchanged (17 and 18 profit cash flow ratios are 1 respectively.

6, 1.

1) The real performance can be achieved under the order system. It is expected that the quality of the company’s income statement and cash flow statement will be excellent at the end of the year.

Some orders realized the current revenue after the increase, while the balance of advance receipts still reached 5.

7.1 billion, indicating that the company has sufficient orders on hand.

Company Q2 cashed 2 in a single quarter.

37 trillion in revenue, of which some operator’s visualization project Q2 confirmed 1.

43 trillion; and the balance of the budget received in advance for two consecutive quarters at 5.

More than 500 million US dollars, indicating that the company’s order reserve is sufficient and sustainable. Broadband revenue increased by 75 in 19H1.

61%, the network visualization business will grow steadily in the medium term.

The company’s H1 broadband network order execution was smooth, and the application range of products such as DFX + situational awareness was expanded to mobile Internet, industrial control networks and other scenarios, which will continue to contribute to overall revenue growth.

Another mobile network revenue fell 35 years.

14%, affected to some extent by 4G / 5G product system switching.

The company reserves the entire 2G to 5G product line. With the commercialization of 5G, the company’s new product gross margin and growth rate will improve.

In summary, we expect that the network visualization revenue will maintain a growth rate of more than 35% in the next three years.

Before the company, the primary collaboration will benefit significantly from the traffic burst in the long run.

The company’s H1 online content security revenue is down 73 per year.

95%, mainly due to the temporary impact of the implementation confirmation cycle of overseas orders.

In addition, big data operating income increased by 630.

70%, in the future, cities, districts, and counties will continue to develop and form synergy with front-end visualization products.

With the continuous outbreak of network traffic and the advancement of the 5G investment cycle, the company’s performance will benefit in the long run.

Maintain profit forecast and “Buy” rating.

Driven by the core 深圳spa会所of traffic, the leading division of front-end network visualization is stable, and network content security and big data services are outstanding. Industrial Internet security products deserve long-term attention, maintaining the profit forecast for 2019-2021 unchanged.

The company’s net profit is expected to be 2 in 19/20/21.



8.6 billion, corresponding to PE of 41/29/21.

Maintain “Buy” rating.