Report guide
Revenue grew rapidly in 2021, and the software business grew by 50% to an all-time high. The new cycle of investment in financial science and technology is good, and the CAGR of software development is expected to exceed 25% in the next three years.
Main points of investment
Benefiting from the new investment cycle of bank IT and financial innovation, the rapid growth of revenue has turned losses into profits.
Benefiting from the new round of financial science and technology investment cycle and the acceleration of financial innovation in 2021, the company achieved revenue of 2.279 billion yuan, an increase of 20% over the same period last year. The rate of sales expenses and management expenses decreased by 0.72 pct and 0.38 pct respectively in 2021, achieving a net profit of 124 million yuan. After a substantial loss of 778 million yuan for goodwill impairment in 2020, the performance returned to the right track.
The rapid growth of software development reached an all-time high of 50%, and the cash flow of the rapid development of integration fluctuated in the short term.
In 2021, the income structure was further optimized. The revenue of the financial technology business reached 2.122 billion yuan, an increase of 35% over the same period last year, accounting for 93% of the income. Of this total, the software development business was 923 million yuan, an increase of 50% over the same period last year, a record high, and the revenue of the system integration business was 1.199 billion yuan, an increase of 25% over the same period last year. Due to the large amount of integrated purchase payments, the operating cash flow in 2021 was-84.87 million yuan, down 137% from the same period last year.
With the superposition of industry cycle, localization and changes in system requirements, the future software business CAGR is expected to exceed 25%.
Benefiting from the banking system upgrading cycle, the new system performance requirements brought about by business mobility and Internet, and superimposed by the innovation policy under the influence of the international situation, the bank will continue to increase investment in science and technology and gradually migrate to the distributed system architecture. The mature system of Daxing is expected to be promoted to small and medium-sized banks. With its rich product experience and deep cooperative relationship with Jianxin Jinke, the compound growth rate of software development and service business is expected to exceed 25% in the next three years.
Profit forecast and valuation
It is estimated that the company's net profit attributable to the parent company from 2022 to 2024 will be 2.06,2.50 and 299 million yuan respectively, an increase of 66%, 21% and 20% respectively over the same period last year. EPS will be 0.46,0.56,0.67 yuan, and the corresponding share price PE will be 24,20,16 times. Give the company the 2022 target PE35 times, corresponding to the total market value of 7.2 billion, the target price of 16.12 yuan, an increase of 47.72%, maintaining the "buy" rating.
Risk tips 1, bank IT investment is less than expected risk; 2, business and talent competition risk.
