Kehua Hengsheng (002335): 3Q19 performance basically meets expected partial savings impairment risk downgraded to neutral rating

Kehua Hengsheng (002335): 3Q19 performance basically meets expected partial savings impairment risk downgraded to neutral rating
Investment advice company 1-3Q19 income 25.800 million, +16 a year.8%; net profit attributable to mother 1.33 trillion, +20 for ten years.2%.Of which 3Q19 revenue was 9.5.4 billion, an increase of 15.1%, net profit is 0.4.3 billion yuan, an increase of 36.9%.The 3Q19 results showed stable growth, basically in line with expectations. The 深圳桑拿网 company forecasts 2019E net profit range to be 1.05-1.42 trillion, or 4Q19 net profit is expected to be -28.46 million to 8.92 million.The preliminary performance guidance was less than our expectation, mainly because we expected the company to expect impairment losses on related assets, including asset impairment. Taking into account the company’s book goodwill value up to 7.82 trillion, and accounts receivable accounted for 24% of total assets, there is a risk of continuous impairment of cracks, downgrade to neutral. The reasons are as follows: Tiandi Xiangyun, a subsidiary of the company, and accounts receivable are subject to impairment risk.The company obtained control of Tiandi Xiangyun in May 2017 and recorded 7.4.7 billion goodwill and accrued 1 in 2018.1.8 billion impairment provision.Tiandi Xiangyun promised 90 million deductions of non-net profit in 2019, only 30.76 million yuan in 1H19, with a completion degree of 40.3%, there is a risk of further impairment.In addition, as of 3Q19, the company’s accounts receivable accounted for 24% of total assets, accounting for 67% of 1-3Q19 revenue.Taking into account the impairment of bad debts of 42.11 million yuan at the end of 2018, we believe that the year-end impairment risk of the company’s receivables is equally high in 2019. The third quarter of 19 was in line with expectations, but the profit-to-revenue ratio was quarter-on-quarter.The company’s 3Q19 revenue increased by 15.1%, net profit increased by 36.9%, preliminary increase in gross profit margin2.6ppt, the cost rate during the period decreases by 0 every year.5ppt.However, compared with the previous month, the company’s revenue fell by 0.4%, net profit fell 22%, profitability growth rate.At the same time, the growth rate of the company’s cloud-based business accounted for only 20% in 1H19. Compared with the downward trend in 2017-2018, the new energy business had a negative growth, and the revenue growth trend had declined significantly. What makes us different from the market?We believe that the impairment risk may be continuous and that the growth of cloud-based business is shortened to amplify performance risks. Potential catalysts: data center demand forecast, photovoltaic and new energy vehicle demand forecast. Earnings Forecasts and Estimates We cut 深圳桑拿网 our 2019/2020 net profit by 49% / 34% to 1.19/1.880,000 yuan, currently corresponding to 40/25 in 2019/2020.5x P / E, cut target price by 26.1% to 17 yuan, corresponding to 39 / 25x P / E for 2019/2020, there is 3.8% of downside space. Risk data center demand exceeded expectations, and the company’s accounts receivable amount and structure improved significantly