标题：Gosuncn Technology A successful bid for a major security surveillance project paves the way for national expansion
发布日期：2016-01-22 13:21:12
内容： Event: Gosuncn Technology announced on January 19, 2016 that it won aBOT (Build-Operate-Transfer) contract for the Security SurveillanceProject of Lishan District, Anshan City, Liaoning Province in northeastChina. The contract value amounts to Rmb41,827,680.00, accountingfor 5.67% of the operating revenue of its 2014 audited consolidatedfinancial statements. Comments The successful bid marks a substantial step for the Company tobuild a national presence for its security surveillance business. In2015, Gosuncn further clarified the objective to expand its nationalcoverage in the security surveillance sector, its core business. Of theRmb360mn operating revenue achieved in 1H15, south Chinacontributed a majority share of 51%, followed by southwest andnorthwest China, which contributed 24% and 8%, respectively. Revenuecontributions from other regional markets are minor: 7% each from northChina and east China, 2% from central China and only 1% fromnortheast China where the BOT project is located. As we can see, theCompany has the weakest presence in northeast China versus otherparts of the country. We believe this large-scaled project (amounting toc.Rmb41mn) represents an opportunity for the Company to furtherexpand its footprint in the locality and expedite the growth of its securitysurveillance business across China. A new three-year plan kicks its high-tech ambition into high gear.The Company designed a three-year development plan for 2016E-18Eat the end of 2015, aiming to expand its presence to new economicfrontiers and new technologies. It plans to make the most of its existingpublic service platform and related big data in the next three years. Onthe one hand, it will continue to focus on horizontal integrations in thesecurity surveillance sector; on the other, it is likely to invest up toRmb300mn to acquire a 36% stake on post-money basis in ANTVR, aChina-based start-up focusing on virtual reality (VR) / wearable devices.In anticipation of fast commercialization of the VR technologies in 2016,we expect the company to be one of the first to tap into the VR segmentand upgrade its operations from B2B to B2C in the new year tocapitalize on its first-mover advantage. The successful inclusion into China’s Torch Program positions theCompany well for a contribution to China’s national securitystrategy. The Company’s proposition of "R&D and Industrialization ofIntelligent Sensing and Augmented Reality (AR) Cameras" has beenapproved and enlisted as a project under China’s Torch Program, agovernment-backed initiative to encourage high-tech innovations. Webelieve this, together with the tie-up with ANTVR, will position thecompany well to capitalize on its own technological advantages and thetechnology pipeline of ANTVR to contribute to China’s national security strategy. This could also add toits strength in AR projects, face recognition technology and artificial intelligence (AI), and strengthen itsproprietary intellectual property rights to support faster commercialization of its technologies. Potential risks: Intensified competition in the smart city segment; potential funding strains; anduncertainties in mergers and acquisitions. Earnings forecast, valuation and investment rating. We maintain our 2015E-17E diluted EPSunchanged at Rmb0.27/0.38/0.54, implying three-year PEs of 59x/43x/30x. We maintain our target priceat Rmb41.7 and reiterate our BUY call on the Company because: 1) We are bullish on the Company’sexisting security surveillance business given its aggressive M&A strategy and looming technologicalstrength in intelligent technologies; and 2) Considering the Company’s new initiatives in the VR and ARsegments, we are confident in its business synergies with ANTVR and the value accretion from it, whichcould make the Company one of the VR/AR giants.
发布日期：2016-01-22 13:21:12
内容： Event: Gosuncn Technology announced on January 19, 2016 that it won aBOT (Build-Operate-Transfer) contract for the Security SurveillanceProject of Lishan District, Anshan City, Liaoning Province in northeastChina. The contract value amounts to Rmb41,827,680.00, accountingfor 5.67% of the operating revenue of its 2014 audited consolidatedfinancial statements. Comments The successful bid marks a substantial step for the Company tobuild a national presence for its security surveillance business. In2015, Gosuncn further clarified the objective to expand its nationalcoverage in the security surveillance sector, its core business. Of theRmb360mn operating revenue achieved in 1H15, south Chinacontributed a majority share of 51%, followed by southwest andnorthwest China, which contributed 24% and 8%, respectively. Revenuecontributions from other regional markets are minor: 7% each from northChina and east China, 2% from central China and only 1% fromnortheast China where the BOT project is located. As we can see, theCompany has the weakest presence in northeast China versus otherparts of the country. We believe this large-scaled project (amounting toc.Rmb41mn) represents an opportunity for the Company to furtherexpand its footprint in the locality and expedite the growth of its securitysurveillance business across China. A new three-year plan kicks its high-tech ambition into high gear.The Company designed a three-year development plan for 2016E-18Eat the end of 2015, aiming to expand its presence to new economicfrontiers and new technologies. It plans to make the most of its existingpublic service platform and related big data in the next three years. Onthe one hand, it will continue to focus on horizontal integrations in thesecurity surveillance sector; on the other, it is likely to invest up toRmb300mn to acquire a 36% stake on post-money basis in ANTVR, aChina-based start-up focusing on virtual reality (VR) / wearable devices.In anticipation of fast commercialization of the VR technologies in 2016,we expect the company to be one of the first to tap into the VR segmentand upgrade its operations from B2B to B2C in the new year tocapitalize on its first-mover advantage. The successful inclusion into China’s Torch Program positions theCompany well for a contribution to China’s national securitystrategy. The Company’s proposition of "R&D and Industrialization ofIntelligent Sensing and Augmented Reality (AR) Cameras" has beenapproved and enlisted as a project under China’s Torch Program, agovernment-backed initiative to encourage high-tech innovations. Webelieve this, together with the tie-up with ANTVR, will position thecompany well to capitalize on its own technological advantages and thetechnology pipeline of ANTVR to contribute to China’s national security strategy. This could also add toits strength in AR projects, face recognition technology and artificial intelligence (AI), and strengthen itsproprietary intellectual property rights to support faster commercialization of its technologies. Potential risks: Intensified competition in the smart city segment; potential funding strains; anduncertainties in mergers and acquisitions. Earnings forecast, valuation and investment rating. We maintain our 2015E-17E diluted EPSunchanged at Rmb0.27/0.38/0.54, implying three-year PEs of 59x/43x/30x. We maintain our target priceat Rmb41.7 and reiterate our BUY call on the Company because: 1) We are bullish on the Company’sexisting security surveillance business given its aggressive M&A strategy and looming technologicalstrength in intelligent technologies; and 2) Considering the Company’s new initiatives in the VR and ARsegments, we are confident in its business synergies with ANTVR and the value accretion from it, whichcould make the Company one of the VR/AR giants.
