3D Communication (002115): Communication business actively adjusts for rapid growth of Internet advertising

Investment Highlights Event: The company announced the 2018 earnings report and realized revenue of 35 in 2018.

900 million (+ 204%), net profit attributable to mother 2.

1 ppm 厦门夜网 (+ 351%), Internet advertising has become a major source of performance growth.

Internet advertising business continued to grow, driving rapid revenue growth.

Since the giant network technology was consolidated in November 2017, if the comparable base in the same period of 2017 is different, assuming that the giant network technology has been consolidated in 2017, then 3D Communication 2017 can achieve revenue17.

500 million, net profit attributable to mother 1.

200000000.

Therefore, the actual 3D communication revenue in 2018 increased by 105%, and the net profit attributable to mothers increased by 72%. Instead of the 65 million yuan obtained by transferring some assets of the company in 2018, the company’s net profit increased by about 20%.

The company’s Internet advertising business is expected to continue to grow rapidly in 2019.

In terms of WeChat’s WeChat long-tail ecology: At the end of February 2019, Tencent’s advertising “joint growth” was replaced in the 2019 regional and mid-long tail channel service providers conference, and Juwang Technology became one of the 9 “2018 breakthrough service providers”Its wholly-owned subsidiary Mengzhou Culture became one of the eight “Excellent Service Providers of 2018”, and the company’s part in the WeChat advertising ecosystem has further improved.

According to the information of Tencent.com, in 2018, Tencent’s advertising officially opened its channels to sink and quickly spread across the country, driving the regional and mid-long-tail business to grow by more than 100%, and fully accumulating power for 19 years.

On the contrary, Tencent Advertising announced its business strategy and development goals for 2019: In 2019, Tencent Advertising will focus on the three major tracks of direct-operated e-commerce and self-media, SMB and LKA effects, and LKA brand.

As the company’s social media advertising for Tencent, as well as self-media advertising, it may benefit directly.

Actively adjust communications network optimization services and cut into 5G infrastructure supplements.

The industry in which the company’s high-end network optimization business is located is widely mature and fiercely competitive. The company has maintained fighting revenue and profit volume.

In the second half of 2018, the company began to invest in 5G infrastructure, and may make positive progress in 2019.

In fact, the company is actively developing new products and solutions suitable for 5G to meet the needs of operator construction, and is expected to enter the market after the completion of 5G infrastructure construction.

Earnings forecasts and investment advice.

It is estimated that the company’s net profit attributable to the parent from 2018 to 2020 will be 2.

13/2.

45/4.

3.4 billion, EPS is 0.

39/0.

44/0.

78 yuan.

We believe that the company’s 2019 performance evaluation target is 2.

2 trillion, and Juwang Technology’s performance commitment for 2019 is 1.

700 million, the company’s performance may be guaranteed.

The company is the realization of social advertising on WeChat traffic in the stock market + scarce bids from media advertising, and the communication business is also expected to take a share in the early and late stages of 5G infrastructure construction and maintain a “buy” rating.

Risk warning: The target performance of the merger or acquisition may be less than expected, WeChat may have risks in controlling the company’s traffic, the progress of the communication business may be less than expected, and the advancement of 5G infrastructure may not be as expected.