The cryptographic business and the zero trust business jointly drive revenue growth and maintain “holdings”
The company disclosed its report for the third quarter of 2021, according to 21Q1-Q3's revenue of 288 million yuan, an increase of 63.7% over the previous year, net loss of 23 million yuan (loss of 34 million yuan in the same period last year), net loss of 44 million yuan after deducting non-net loss (loss of 43 million yuan for the same period last year); 21Q3's single-quarter revenue was 111 million yuan, up 72.8% year on year, and Guimu's net profit was 0.2 million yuan, up 72.8% year on year. The company is steadily promoting the cryptographic business and zero trust security business, and the expansion of application scenarios is expected to drive performance growth. Net profit attributable to the mother in 2021-2023 is estimated to be 132/1.82/241 million yuan (maintaining the forecast). Comparable to the company's average valuation (Wind) 21E 26.4x PE, 21E 26.4xPE was given, and the target price was 15.01 yuan (previous value: 16.55 yuan), maintaining the “increase in holdings” rating.
Building a security protection system based on cryptographic technology is expected to gradually expand the company's security protection system based on cryptographic technology, combining emerging technologies such as cloud computing, big data, the Internet of Things, and artificial intelligence to create a security protection system for specific application scenarios. For example, in the field of Internet of Vehicles, the company created an intelligent connected vehicle security protection system by building and perfecting the Internet of Vehicles cryptographic public key infrastructure, providing security middleware suitable for various Internet of Vehicles terminal devices, and building a security platform for the application of Internet of Vehicles certificates, to form a true cloud cryptographic application system. In September 2021, the company and its partners launched the “Commercial Cryptographic Certificate Trust Program” to provide users with support for nationally confidential certificate application scenarios and accelerate the promotion and application of domestic passwords.
We believe that the company is expected to use leading technology in the cryptographic field to gradually expand the application scenarios of generic cryptographic products and provide impetus for the company's growth.
The zero trust solution is expected to be promoted, or it may open up the market for the company's related products. The company's zero trust solution concept is advanced and has rich application scenarios, and has potential for further promotion.
In July 2021, the company showcased its zero trust solutions and related cases at the 9th Internet Security Conference. The product has formed a zero-trust architecture with passwords as the cornerstone, identity-centered, and policy-driven SDP. In August 2021, the company participated in the Zero Trust Collaborative Development Seminar and Interface White Paper Release & Standards Promotion Conference to participate in discussions on industry standards formulation. In the future, the company is expected to participate in the formulation and revision of zero trust standards to continuously solve the problems existing in the implementation of zero trust products and create conditions for the company to establish a first-mover advantage in related fields. We believe that the company's related products have an opportunity to become a benchmark in the zero trust product market, providing impetus for the company to further expand its market space.
Application scenarios are expected to gradually expand and “increase holdings”
We believe that based on the company's deep accumulation in the field of cryptographic technology represented by PKI, application scenarios are expected to continue to expand, providing impetus for the company's revenue growth. Maintaining profit forecasts, revenue for 2021-2023 is expected to be 645/888/1,157 million yuan, and net profit of the mother is 132/1.82/241 million yuan (maintenance of previous value).
Risk warning: Information security policies fall short of expectations, and security business progress falls short of expectations.
