HKUST News Flying (002230): Management of qualitative change in revenue accelerating cash flow hits best in history

HKUST News Flying (002230): Management of qualitative change in revenue accelerating cash flow hits best in history
The company released the 2019 performance forecast: It is estimated that the net profit attributable to mothers in 20197.32-8.94 ppm, a year-on-year increase of 35% -65%, with a median of 50%, in line with our expectations.At the same time, the company disclosed that its 2019 revenue is expected to exceed 10 billion and the net cash flow from operating activities is about 1.5 billion. 19Q4 revenue accelerated, and per capita efficiency improved, verifying the realization of AI dividends.The company’s headquarters revenue exceeded the tens of billions mark, which means that the growth rate of single-quarter revenue in 19Q4 rebounded to more than 30%.At the same time, the company’s per capita efficiency continued to increase (the gross profit per capita exceeded 30% in the first three quarters of 19, and the gradual trend is expected to continue), and the net profit growth rate remained high, verifying that the company has optimized the management and focused on the core track to enter the AI dividendRedemption period. The best level of cash flow in history!The company’s 19-year operating net cash flow was approximately 1.5 billion, which was nearly twice the net profit, and the annual growth rate was approximately 30%.I believe that the two main factors contribute: 1) the company strengthens the repayment, and optimizes the balance sheet synchronously; 2) the productization rate, and the proportion of SaaS services has increased significantly, especially the C-side personalized learning products of Zhixue.com have quickly covered consumersThe transformation of business explosives resulted in the continuous improvement of the company’s business model. The biggest expected difference is in qualitative change in management.In the recent in-depth report “HKUST Xunfei (002230)” in depth: Embracing AI Dividends after Management Optimization, we comprehensively sorted out the company’s internal strategic progress for the first time: 1) In line with the development stage of the AI industry, from the pursuit of technology to good products and management,Prepare for the gradual peak; 2) Implement business unit efficiency through business unit reform and incremental performance management; 3) Implement the EMT system and “Spring Xiao Action 2”.0 “, bringing together polyoxymethylene talents; 4) Promoting internal resources to ensure the efficiency of the company system in terms of system design.After the qualitative change in management, the company’s operating efficiency and per capita efficiency continued to improve, bringing a turning point in performance. Maintain profit forecast and “overweight” rating.Companies in AI Strategy 2.Driven by 0, it is expected to gradually realize cash dividends in core tracks such as education, politics, law, consumers, and medical care; meanwhile, the productization 杭州夜生活网 rate will increase, the track control panel, and the deep integration of AI technology will promote the increase in gross profit margin; management optimizationLater, the personnel growth rate will be significantly improved, the per capita efficiency will increase, and the expense ratio will decrease during this period, and profits will enter a high growth channel.Maintain the profit forecast. It is expected that the company’s revenue from 2019 to 2021 will be 103.7/141.7/187.1 ‰; net profit attributable to mothers is 8.30/13.01/19.30 ppm, corresponding to PE 93/60/40 times, maintaining the overweight rating. Risk reminders: The investment in education informatization construction does not meet expectations; there is uncertainty in the competitive environment; the sustainability of per capita performance improvement; and the risk of account receivables recovery.

Posted in Uncategorized