Event: the company released three quarterly reports, 2021Q3 achieved revenue of 184 million yuan, an increase of 56.91% over the same period last year, an increase of 148.65% compared to 2019Q3, and realized a net profit of 52.2826 million yuan, in line with market expectations.
Main points of investment
High revenue growth and higher profit than expected: Dongtong released three quarterly reports, with revenue of 392 million yuan so far this year, an increase of 94.85% over the same period last year, and a net profit of 38.2 million yuan, an increase of 258.13% over the same period last year. Revenue in the third quarter reached 184 million yuan per quarter, an increase of 56.91% over the same period last year. Compared with an increase of only 0.24% in the second quarter, revenue returned to the fast track in the third and fourth quarters of this year, in line with the expectation that the downstream customer bidding will release the volume step by step. The company's annual performance is expected to remain unchanged.
There are plenty of orders on hand, Q4 is worth looking forward to: as of September 30, 2021, Dongtong middleware orders amount to 285 million yuan, basically reaching the level of 2020, an increase of more than 150% over the same period last year.
Pay attention to the bidding expectation of the party, government and financial Xinchuang in Q4.
Invest in stocks and wait for flowers to bloom: in August, the company signed a "Memorandum of Strategic Cooperation" with China Mobile Limited and China Mobile Capital. In September, the company received a notice of resumption of audit. At present, related matters are progressing steadily, and we look forward to the follow-up China Mobile Limited to bring more than 2 billion new contracts to the company from 2021 to 2023.
Profit Forecast and Investment rating: we maintain Dongfang Tong's 2021-2023 income forecast of RMB 1.863 billion, net profit of RMB 4.15 million, EPS of 0.91 PE for 2021-2023, and current market capitalization of RMB 1.77max for 2021-2023.
We continue to be optimistic about the development prospects and performance flexibility of Dongtong as a leader in the middleware industry, pay attention to the investment opportunities of fixed growth promotion and follow-up bidding of Xinchuang industry, and maintain the "buy" rating.
Risk hint: the promotion of localization policy is not up to expectations; the intensification of competition in the industry leads to a decline in product prices.