Hikvision (002415) In-depth Study: Unified Software Architecture Softens Presets!

Hikvision (002415) In-depth Study: Unified Software Architecture Softens Presets!

Key points of investment: The expected difference in this report is that the system is aligned with Haikang’s softening transformation logic, transforming the driving force of AI empowerment—the ROI is measured and verified, and the softened financial characteristics are deduced, which proves Haikang ‘s long-term performanceBeyond expectations.

  Completion of the qualitative transformation of softening and transformation, and the value-added software of the tax rebate inverse calculation are more than 10 billion yuan.

The company established a software and hardware integration company with “embedded software” as its core competitiveness.

After three years of construction, the unified software architecture will be completed in the second half of 2018 to realize the gradual softening.

Based on qualified tax rebates, the company’s software added value in 2018 reached US $ 13.6 billion, accounting for 60% of gross profit.

  The unified software architecture is essentially the rise of China and Taiwan, and the barriers are confirmed by replacement costs.

On the basis of a unified software architecture, the company can efficiently meet a large number of downstream fragmentation needs in a complementary component manner, which is essentially consistent with the China-Taiwan strategy promoted by computer leaders such as Hang Seng, UFIDA, and Guanglianda.

In addition, Haikang has already established a trend and has taken the lead to complete the China-Taiwan upgrade. At the same time, the organization has made a lot of significant progress to establish three major BGs.

During the construction period of 16-18 years, the company expanded 8,829 R & D personnel, and the total R & D / sales budget expansion increased by 7.2 billion, which can be approximated as the replacement cost, reflecting the high barriers to unified software architecture.

  Self-security cuts into AI empowerment, opening up five times more space.

From 2016 to 2017, AIization will allow the company to find new capacity. Starting from 2020, AIization based on a unified platform will double the incremental space and become a new round of growth engine.

1) The 2015 annual report clearly proposes intelligent manufacturing to serve machine vision solutions to industry.

2) The 2018 annual report is strategically upgraded to the Intelligent Internet of Things and AI empowerment.

The business of the EBG industry is divided into nearly 20 sub-industries, which are summarized into four main lines: the business world, social power, good life and wealth growth.

3) Calculating only the intelligent manufacturing space, which is 5 times the security, and the AI enabling space is expected to exceed one trillion.

  Customers with high return on investment and Haikang LTV decided to soften popularity.

The official public account of the Hikvision AI Open Platform provides multiple AI cases. 南宁桑拿 Our detailed calculation of the ROI (return on investment) of customers after purchase is mainly 50% -150%, which proves that customers have the incentive to continue to purchase Hikvision softening products.

At the same time, through the adoption of common software, Hikvision’s own LTV increased.

  In addition, a large number of cost-effective AI chips will be launched in 2020, which will significantly reduce the cost of AI empowerment and transformation.

  AI empowerment and deduction of financial characteristics after cloudification improvement: 1) Gross profit margin increased, mainly due to software value-added enhancement and AI chip cost reduction.

The qualitative change of the softening transition is reflected in the gradual increase in gross attenuation from 30% + to close to 50%. The former is the typical gross profit margin of hardware companies and the software company.

2) During the period, the expense ratio decreased, mainly due to the increase in the software add-on rate and the increase in expenditure.

Since 18Q4, the company’s salary growth center has dropped from more than 50% to about 30%.

Further forecasts are expected in 19/20.

3) The optimization of cash flow and balance sheet was mainly due to the forward-looking management and the improvement of SaaS business.

  The company has optimized the balance sheet in advance, and realized 18Q2-Q3 inventory optimization and 18Q4-19Q1 receivable optimization; the subsequent increase in the proportion of cloud SaaS services will bring about comprehensive optimization of cash flow / receivables / inventory.

  Upgrade earnings forecast and maintain “Buy” rating.

The company has completed three major qualitative changes in the softening transformation, organizational structure, and growth mainline. The unified software architecture structure has exceeded the expected foundation for long-term and mid-term performance. AI empowerment has opened up more than five times the blue ocean space.

Increase the profit forecast, it is expected that the net profit attributable to mothers in 2019-2021 will be 128.

1/156.

3/195.

6 trillion (original predictor variable 125.

6/150.

4/174.

400000000).

According to the two PE / DCF estimation methods, the target market value is 5380 ppm, and the upside is 55%.

  Risk reminder: the impact of the epidemic, uncertainty in the external environment, and uncertainty on the demand side caused by macroeconomic changes