HKUST Xunfei (002230): The core business card has obvious advantages in cost control and has achieved significant results

HKUST Xunfei (002230): The core business card has obvious advantages in cost control and has achieved significant results
Guide to this report: The company participates in exchange day activities.The company’s core business has obvious advantages, weakened by financial impact, has significant cost control benefits, and maintains an increase in holdings.  Event: On August 23, the company participated in the exchange day activities.  Comment: Maintain overweight.The core business has obvious advantages, is weakened by financial impact, and has significant cost control benefits. It maintains the forecast of EPS0 for 2019-2021.41/0.62/1.02 yuan, maintaining a target price of 40.58 yuan. The company has certain obvious advantages in the three major scenarios and is expected to become the main growth point.1) Office scene: The company has formed a full-stack product system around the office scene, covering hearing website services for light users (unit price below 1,000 yuan), M1 / recording for medium users (unit price of several thousand yuan)Pens / offices, transcribing machines for B-end users (customer unit price over ten thousand yuan).2) Educational scenario: B-side business penetration rate has further improved space, and merged B-side data accumulation to extend to C-side, gradually realizing business connotation (education information to AI), business model (project model to product system, operation system)Two advanced.3) Political and legal scenes: Political and legal services have covered 31 provinces, and the coverage rate has exceeded 90% in high-level institutions such as high courts and provincial inspections. The requirements for confidentiality of political and legal industry data are high, and the degree of standardization is high.4) We believe that the company has realized the G-end card position advantage + B-end segmented industry data advantage in all three core scenarios, and integrated the moat of the protection industry, and gradually realized overweight C-end business to realize data monetization. Track focus / C-end business development, weakened by financial conditions.1) The company’s consolidated revenue growth has improved. In addition to the company’s active focus on the core track and strategic contraction of products with little room for future development, it is also related to increased government financial pressure.2) We believe that the impact of the expansion of government financial pressure on the company will gradually be broken down: ① At the end of the business exploration phase, the company’s business will be more focused on core tracks such as education and medical care, which have counter-cyclical attributes; 佛山桑拿网 ② C-end business proportionHope to further improve, the 2019 H1 company’s C-end business (including intelligent hardware, open platforms, telecommunications value-added product operations, mobile Internet products and services, personalized learning, etc.) revenue growth rate of 45%, higher than the company’s overall growth rate of 13.7 points, revenue and gross profit accounted for 37.3%, 39.8%, an increase of 3.5pct, 2.5 points. The cost control benefits are significant, and the profit margin outlook is gradually picking up.1) 2019H1 company’s sales expense growth rate is 20.4%, management expenses increased by 30%.7%, all far below 2018H1 (77.1%, 65.6%), indicating that the company has achieved significant achievements in cost control.2) During the business exploration period, the company experienced the rapid expansion 四川耍耍网 of technical personnel (2016, 2017) and the rapid expansion of marketing personnel (2018), changing the focus of the company’s business direction, improving channel construction, and promoting the concentration of resourcesAt the core circuit, the demand for additional personnel will be effectively controlled, and profit margins are expected to gradually rise. Risk Warning: Financial pressure threatens the company’s B-side business expansion, etc.