HKUST News (002230): Cash flow improves quarter by quarter, AI Tap is expected in the future

HKUST News (002230): Cash flow improves quarter by quarter, AI Tap is expected in the future
Event: The company released the 2019 third quarter report: reporting and achieving operating income of 65.7.3 billion with an increase of 24.4%, achieving net profit attributable to shareholders of listed companies.7.4 billion increased by 70.5%, the net profit attributable to shareholders of listed companies after deduction of non-recurring net profit 杭州桑拿 of 69.81 million yuan increased 183.5%.Among them, Q3 achieved operating income of 23.4.5 billion with an increase of 13.1%, realizing net profit attributable to shareholders of listed companies.8.4 billion increased by 108.1%, the net profit attributable to shareholders of the listed company after deduction of 38.18 million yuan increased by 762.3%.Both are close to the upper limit of performance forecast.  The sales expense ratio decreased, and the cash flow improved quarter by quarter. The company’s single quarter sales expense ratio for 2018Q1-2019Q3 were: 23.1%, 22.7%, 21.5%, 20.8%, 18.8%, 22.7%, 18.1%, the sales expense ratio in 2019 has dropped significantly in the same period of 2018.Net cash flows from operating activities in the single quarter of 2018Q1-2019Q3 were: -6.300 million, -1.900 million, 1.300 million, 18.400 million, -5.300 million, -2.1 trillion, 3 trillion, cash flow quality improved quarter by quarter.The company has a very good technical lead, and the report covers that the internal management expense rate of R & D expenditure is basically the same as that of the same period last year.  The revenue structure continues to be optimized. The AI leader can follow our division in the future. From 2017 to 2019, the company’s A-type business revenue ratio has gradually increased, the B-type business revenue ratio has remained flat, and the C-type business revenue ratio has decreased year by year.It reflects the company’s initiative to adjust the income structure and gradually achieve achievements, and the income structure continued to be optimized.At the same time, it may bring some pressure on the income side in the short term.The company has basically completed the core talent reserves of all business lines and the construction of a national sales network. Under the background that the staff growth rate is significantly lower than the revenue growth rate, the company’s expense rate improvement and performance elasticity have been confirmed.The artificial intelligence industry is in a strategic development period. While maintaining the core technology leadership, it is a complementary path choice to continuously explore commercial applications based on technological breakthroughs.As a leading company in the domestic AI field, the company is leading the technology and deeply cultivating the industry. When the possibility of the industry comes, the company’s 北京夜生活网 leading advantage will be more significant.  Investment suggestion: Maintain the company’s net profit attributable to the parent company for 2019-2021 to 9, respectively.22, 12.72, 16.99 ppm, corresponding to 2019-2021 EPS is 0.42, 0.58, 0.77 yuan / share, maintaining the “overweight” rating.  Risk warning: New product promotion is not up to expectations, and market competition is intensifying.