Incident: The company achieved operating income of 288 million yuan from January to September 2021 in the first three quarters of 2021, an increase of 63.71% over the previous year. Net profit attributable to shareholders of listed companies was a loss of 22.8499 million yuan, a year-on-year decrease of 32.28%, in line with market expectations.
Key points of investment
Revenue grew rapidly, and the quality of operations continued to improve: the company's revenue for the 2021/Q3 single quarter was 111 million yuan, an increase of 72.76% over the previous year, and Guimu's net profit was 2.0536 million yuan, an increase of 76.39% over the previous year. As of September 30, contract debt was 307 million yuan, an increase of 22.3% compared to the end of Q2 and an increase of 61.8% compared to the beginning of the year. The Xinchuang market and the volume of PKI-related products continued to drive rapid growth in performance. The quality of operations continued to improve, and the gross profit margin of 2021Q1-Q3 was 57.5%, an increase of 3.2 pct over the previous year. 2021Q1-Q3 R&D expenses ratio is 23.36% (year-on-year -9.12pct), sales expenses ratio is 17.11% (year-on-year -3.43pct), and management expenses ratio is 35.95% (year-on-year +6.72pct).
Building a zero trust system, the project continues to be implemented: Adhering to the idea of “password as the cornerstone, identity as the core, authority as the starting point, and software-defined boundaries”, the company built a zero trust architecture of “cryptographic, identity-centered, strategy-driven SDP” to help customers achieve digital transformation, applied to various business scenarios such as cloud computing, big data, the Internet of Things, mobile Internet, etc., and has implemented projects and won awards in energy and other industries.
Information security application scenarios are expanding, and PKI leaders are actively deploying: information security policies are frequently introduced for new application scenarios such as the industrial Internet, the Internet of Things, and the Internet of Vehicles. The company is actively deploying as a PKI leader and is committed to providing overall digital asset security solutions for various scenarios. On October 8, 2021, the National Information Security Standardization Technical Committee issued the “Safety Guidelines for Automobile Collection Data Processing”, which stipulates the safety requirements for processing activities such as transmission, storage, and exit of automobile collected data. The company can provide a complete, reliable, usable, and intelligent connected vehicle security protection system for connected vehicle security that complies with national independent information security standards, forming a true cloud password application system. In addition, the company actively participated in the formulation of industry standards, and recently the “Security Technical Requirements for Public Security Video Image Information Systems” series of standards that it participated in preparing was officially released.
Profit forecast and investment rating: Considering the company's outstanding technical advantages in PKI and the continued expansion of markets such as Xinchuang, we maintain the net profit forecast for 2021-2023 at 1.1/15/20 billion yuan. The corresponding EPS for 2021-2023 is 0.46/0.65/0.87 yuan, and the corresponding PE is 28/20/15 times, respectively. Continue to be optimistic about the company's new application scenarios to expand its capabilities and maintain its “buy” rating.
Risk warning: The information security market fell short of expectations, and the construction of a secure cloud platform fell short of expectations.
