According to the announcement, Sanchuan Wisdom’s 2015 operating revenue totaled 647 million yuan, a year-on-year decrease of 7.29%, operating profit of RMB 127 million, a year-on-year decrease of 14.36%, total profit of RMB 169 million, a year-on-year increase of 0.17%, and net profit of RMB 139 million. The growth rate was 11% and the increase was 5.68%. It is estimated that in the first quarter of 2016, the net profit of the parent will be RMB 241,800,800,000, an increase of 20% to 40%.
In 2015, the company's water metering business revenue was 622 million yuan, a year-on-year decrease of 5.87%, of which traditional watch revenue (general watch, water meter) was 004 million yuan, a year-on-year decrease of 4.78%, and smart watch revenue was 250 million yuan, a year-on-year decrease of 1.02%. According to statistics, the revenue of smart-based smart metering in the smart meter was only about RMB 92 million, a decrease of about 36% year-on-year, and the drop in income from traditional watches and smart-based meters caused the revenue of meter business to drop by about 6%.
Affected by the company's direct entry into smart watches, it has formed direct competition with the original smart-base customers, and sales of smart-base watches have declined. However, in 2015, the company’s accumulated sales of smart watches exceeded 800,000 units, an increase of 33.45% year-on-year, while the average sales unit price increased, and smart watch sales revenue increased by 44.42%.
In 2015, Sanchuan Wisdom’s macroeconomic performance continued to be sluggish throughout the year, and sales revenue continued to decline. In 2016, it will adjust its strategy and position it as “Smart Water + Internet Finance + Industrial Investmentâ€. Sanchuan Wisdom Co., Ltd. set up Shanghai Sanchuan Ai Water Technology Co., Ltd., a smart water software company in Shanghai in early 2016, to expand Sanchuan’s wisdom in the smart water industry and provide customers with comprehensive management of water information, app user water life experience and Water finance and other services. At the same time, Sanchuan Wisdom is also actively planning to set up an industry mergers and acquisitions fund to conduct industrial mergers and acquisitions around the two major business sectors of smart water and internet finance.
The high growth of smart watchmaking and the stabilization of the base watch will drive the revenue growth and gross profit margin of the water meter business. After the strategic direction is clear, the extension of the expansion will accelerate. The 2016-2018 EPS is expected to be 0.42, 0.54, and 0.70 yuan, which is maintained in the “overweight†rating in the 16-year strategy report.
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