First coverage, a rating for increasing holdings was given, and the target price was 31.44 yuan. The EPS for 2021-2023 is predicted to be 0.41/0.64/1.00 yuan, and the target price is 31.44 yuan, corresponding to 7.42 times PS in 2022.
The development of connected vehicle security will exceed expectations. Ger Software has cooperated with OEMs to build a cloud-based PKI system. Gore Software has built a security certificate management system for the Internet of Vehicles wireless communication technology for SAIC Motor Forward, including V2X and V2N security certificate systems. In addition, Ger Software also built a comprehensive certificate management system, a digital certificate authentication system, and a signature verification system for SAIC Motor's cloud data center mobile office project, and a cloud-based PKI system for SAIC Motor's overseas travel.
With PKI as the core, the company has formed an “application+infrastructure+general security” business system. Among them, the domestic market share of PKI infrastructure products and PKI security application products has maintained a high level for many years in a row. The products formed include: “Secure Certified Gateways”, “Trusted Border Security Gateways”, “Wireless Security Gateways”, etc.
The company has maintained a steady revenue growth rate of around 20%. Beginning in 2021, the revenue growth rate was 63.71% in the first three quarters. We believe that Xinchuang will significantly drive performance growth. The next three years will enter a period of rapid growth. With the development of innovative business and the growth of Xinchuang's revenue, the company's revenue growth rate will increase significantly. Since PKI has high technical barriers and qualifications, customers also have requirements for benchmark cases. The company has been leading the industry for a long time and has strong bargaining power. At the same time, the company's product self-development ratio is high, so it can maintain a high gross margin level. The company's revenue growth rate in the first three quarters of 2021 was 63.71%, and the development logic has been verified.
Risk warning: Industry development falls short of expectations, government budget expenditure is insufficient