The compound growth rate of revenue in the past three years has reached 26.53%. Softcom Power is a software and information technology service provider with profound industry accumulation and comprehensive technical strength. the main business is to provide end-to-end software and digital technology services and digital operation services for customers in communication equipment, Internet services, finance, high-tech and manufacturing industries. 2018-2021H1's main business income has increased steadily, with a compound revenue growth rate of 26.53% in the past three years. Among them, the revenue of software and digital technology services is 7.727 billion yuan, 9.953 billion yuan, 12.188 billion yuan and 7.094 billion yuan respectively, and that of digital operation is 358 million yuan, 612 million yuan, 793 million yuan and 532 million yuan respectively. In 2021, the company achieved revenue of 16.623 billion yuan, an increase of 27.88% over the same period last year, net profit of 945 million yuan, down 24.94%, and net profit of 868 million yuan, down 21.51% from the same period last year (mainly because Huawei, an important customer of the company, is in a period of strategic transformation. the company increases relevant investment based on the long-term development strategy that accompanies customer growth).

Gross profit margin in 2021 was 24.67%, down 2.55pct from the same period last year. In 2021, the sales expenses were 578 million yuan, an increase of 54.91% over the same period last year; and the management expenses were 1.414 billion yuan, an increase of 38.57% over the same period last year, both of which were higher than the revenue growth rate. In 2021, the company's operating net cash flow is 662 million yuan. According to the company's prospectus, 2022Q1 expects revenue of 4.554 billion yuan, an increase of 28.12% over the same period last year; net profit of 88 million yuan, an increase of 11.96%; and net profit of 81 million yuan, an increase of 15.37% over the same period last year.

General technical services, digital technical services, consulting and solution services at the same time. The company's software and digital technology services are according to customer needs, to provide them with software, information systems, electronic circuit products for the design, development, testing, operation and maintenance, data processing and other comprehensive services. This service focuses on the development of digital economy and fully empowers customers, forming general technical services guided by conventional technology, digital technology services guided by emerging technologies, and consulting and solution services guided by digital transformation. thus, it meets the information technology service needs of customers from R & D to application. The company's digital operation service is an important part of the multi-level service system, mainly through digital technical means and professional skills to help customers deal with problems in business operation and improve operational efficiency. The company has nearly 100 branches and more than 20 global delivery centers in more than 40 cities around the world, serving more than 1000 domestic and foreign customers, including more than 200 of the world's top 500 or China's top 500 enterprises.

Digital operation service is an important part of the company's service system. With the acceleration of digital industrialization, enterprises outsource more operational business processes and functional positions to suppliers with professional capabilities, so as to improve operational efficiency. With the advantages of scale, specialization and efficiency control, Softcom Power provides customers with high-quality and efficient customer service, digital content services and business process services with digital technical means, professional skills and standardized operation. There are fundamental differences in service contents between software and digital technology services and digital operation services. Software and digital technology services mainly undertake customer-related information technology service needs, including the design, development, testing, operation and maintenance, data processing of software, information systems, electronic circuit products, etc. Digital operation service mainly undertakes the needs of customer operation service, including customer service, digital content service and business process service.

It has strong stickiness to leading enterprises. The company's main customers include Huawei, BABA, Tencent, Baidu, Inc., Bank of China Ltd. and other large well-known enterprises, business stability and sustainability is good. 2018-2021H1, the company's combined sales revenue to the top five customers accounted for 67.04%, 68.55%, 69.88% and 65.46% of the company's operating income, respectively, of which the sales revenue to Huawei accounted for 53.38%, 55.45%, 55.53% and 49.70%, respectively. In 2020, the company's revenue by industry, communications equipment accounted for 55.96%, Internet services accounted for 16.24%, finance accounted for 14.12%, high-tech and manufacturing 10.35%, and other accounted for 3.33%.

Profit forecast and investment advice. With the mission of "innovative thinking and digital technology to create value for customers", Softcom Power is committed to becoming a globally influential digital technology service leader and a reliable partner in the digital transformation of enterprises. As a leader in digital transformation, the company continues to subvert and innovate, fully embrace the new economy dominated by the information industry, firmly grasp the new growth points of the market, and apply leading and comprehensive technological strength. long-term to provide customers with end-to-end software and digital technology services and digital operation services to create value for customers in various fields. The company will actively lay out the vertical industry in the future. We believe that the growth rates of communications equipment, Internet services, finance, high-tech and manufacturing business in 2022 will be 17%, 40%, 30% and 50% respectively, and the gross profit margin as a whole is relatively stable. We estimate that the net profit of 2022, 2023, 2024, and 2024 will be 14.68, 19.31, 2.485 million yuan, respectively, and the EPS will be 3.474.56, 5.87 yuan, respectively, and give the dynamic PE20-25 times in 2022. The reasonable value range of 6 months is 69.40-86.75 yuan, which is rated as "better than the big city" for the first time.

Risk hint. The demand of a single major customer or sticky decline, Sino-US trade friction, rapid rise in labor costs, epidemic and other macro factors.