In the first half of 2021, the company achieved operating income of 96.72 million yuan, an increase of 28.27% over the same period last year, a net profit of 28.86 million yuan, an increase of 14.13% over the same period last year, and a non-return net profit of 20.69 million yuan, an increase of 17.21% over the same period last year. In a single quarter, the operating income of Q2 was 51.96 million yuan, an increase of 11.16% over the same period last year, while the net profit was 11.59 million yuan, down 27.89% from the same period last year.
Firmware business is growing rapidly and revenue structure is optimized. In the first half of 2021, the company's firmware business achieved revenue of 61.9807 million yuan, an increase of 37.54% over the same period last year, while cloud services business achieved revenue of 33.5895 million yuan, an increase of 16.49%. The company's revenue structure was optimized, and the proportion of firmware revenue reached 64.08%, an increase of 4.32 percentage points over the first half of 2020, driving the company's gross profit margin from 58.32% in the first half of 2020 to 59.56% in the first half of 2021.
Release new firmware products to comply with the development trend of BIOS. With the development of Internet of things and embedded technology, BIOS which supports "multi-architecture and multi-operating system" has become a development trend. On June 28, the company released ByoCore 2.0 products that adopt a unified core framework and code organization to support international computing chips and domestic independently innovative computing chips, and continue to follow the international general system firmware UEFI specification. The product can serve the world's mainstream computing chips such as Kunpeng, Feiteng, Godson, Mega, Haiguang, Shenwei, Intel Corp and AMD, as well as Windows and Linux operating systems. At the same time, it also fully supports the demand function of national Xinchuang products. The new product release will better meet the needs of customers and promote the sustainable development of the company's firmware business.
Continue to increase R & D investment and be optimistic about the company's card position advantage. In the first half of 2021, the company's R & D expenditure was 18.08 million yuan, an increase of 15.35% over the same period last year; the number of R & D personnel was 565, a net increase of 171.The proportion of R & D personnel increased to 88.01% from 84.01% at the end of the first half of 2020. As one of the four mainstream X86 architecture BIOS firmware products and technology manufacturers in the world, the company undertakes the main R & D and industrialization of domestic CPU BIOS and BMC firmware, and is optimistic about the company's clamping advantages in the firmware field.
Profit forecast: the company's operating income in 2021-2023 is expected to be 2.91,4.13 and 572 million yuan, the net profit returned to its mother is 0.85,1.22,168 million yuan, EPS 0.98,1.40,1.93 yuan, and the corresponding share price PE is 41.84,29.25,21.21 times. As one of the four mainstream X86 architecture BIOS firmware products and technology manufacturers in the world, the company releases new firmware products, is optimistic about its card position advantage, and maintains a "buy" rating with a six-month target price of 50 yuan.
Risk tips: intensified market competition, downstream servers, PC shipments are not as expected.