标题：Anhui USTC iFLYTEK2015 profit alert miss：Higher-than-expected SG&A;Maintain Buy
发布日期：2016-03-01 7:17:49
内容： What's changed On February 26, 2016, iFLYTEK announced preliminary FY15 results withtotal revenue of Rmb2,505 mn (+41.1% yoy, -6.4% vs. GHe) as well as netprofit of Rmb419mn (+10.5% yoy, -14.2% vs. GHe). The company attributedrevenue growth mainly to its core business in voice application softwaredevelopment as iFLYTEK continues to benefit from China’s fast growingintelligence speech market. The company also commented that its bottomline result was impacted by increasing R&D spending and marketingexpense, as iFLYTEK continues to grow its artificial intelligence related Implications We expect the company’s higher R&D ratio impact to be more short termin nature in 2015-16. The company introduced new products focusing onartificial intelligence in its 2015 Product Launch in December 2015. Moredetails can be found in our December 22, 2016 report titled, 2015 ProductLaunch focuses on artificial intelligence; reiterate Buy. Valuation We lower our 2015E/16E/17E earnings by 14.3%/10.2%/4.5% and by 5.9-6.6% for 2018E-20E earnings to factor in the higher-than-expected R&Dexpenditure. We cut our 12-m long-term discounted P/E based TP toRmb35.2 (from Rmb37.7) based on an unchanged global peer median of2016E P/E of 25X applied to our 2020E EPS of Rmb1.91 (was Rmb2.04)discounted to 2016E at 7.9% COE. Maintain Buy on increasing applicationsfor intelligent speech and artificial intelligence technology. Key risks Slower-than-expected growth in core business and new productdevelopment.
发布日期：2016-03-01 7:17:49
内容： What's changed On February 26, 2016, iFLYTEK announced preliminary FY15 results withtotal revenue of Rmb2,505 mn (+41.1% yoy, -6.4% vs. GHe) as well as netprofit of Rmb419mn (+10.5% yoy, -14.2% vs. GHe). The company attributedrevenue growth mainly to its core business in voice application softwaredevelopment as iFLYTEK continues to benefit from China’s fast growingintelligence speech market. The company also commented that its bottomline result was impacted by increasing R&D spending and marketingexpense, as iFLYTEK continues to grow its artificial intelligence related Implications We expect the company’s higher R&D ratio impact to be more short termin nature in 2015-16. The company introduced new products focusing onartificial intelligence in its 2015 Product Launch in December 2015. Moredetails can be found in our December 22, 2016 report titled, 2015 ProductLaunch focuses on artificial intelligence; reiterate Buy. Valuation We lower our 2015E/16E/17E earnings by 14.3%/10.2%/4.5% and by 5.9-6.6% for 2018E-20E earnings to factor in the higher-than-expected R&Dexpenditure. We cut our 12-m long-term discounted P/E based TP toRmb35.2 (from Rmb37.7) based on an unchanged global peer median of2016E P/E of 25X applied to our 2020E EPS of Rmb1.91 (was Rmb2.04)discounted to 2016E at 7.9% COE. Maintain Buy on increasing applicationsfor intelligent speech and artificial intelligence technology. Key risks Slower-than-expected growth in core business and new productdevelopment.
