What happened: the company released its annual report in 2021 and quarterly report in 2022. In 2021, the company achieved operating income of 2.789 billion yuan, an increase of 17% over the same period last year, and a net profit of 238 million yuan, an increase of 47% over the same period last year. In 2022, Q1 achieved an operating income of 631 million yuan, an increase of 123% over the same period last year, while its mother's net profit lost 38 million yuan, an increase of 49.5% over the same period last year, exceeding market expectations.
Main points of investment
Focus on data security, 2022Q1 revenue exceeds market expectations: in 2021, the company focuses on data security business, focusing on data classification protection with passwords as the core, security supervision and governance, security sharing and utilization, and other data security technology research and product development. From the perspective of business, the company's revenue from security chip and module business in 2021 was 503 million yuan, an increase of 33.65% over the same period last year, with a gross profit margin of 56.16% (year-on-0.78pct); revenue from security machine and systems business was 727 million yuan, an increase of 25.17% over the same period last year, with a gross profit margin of 65.94% (year-on-year + 10.88pct) Revenue from the security and integration business was 1.558 billion yuan, an increase of 9.27% over the same period last year, with a gross profit margin of 18.96% (year-on-year-2.87pct). In 2021, the overall gross profit margin was 37.92%, an increase of 2.44pct over the same period last year; and the net return rate was 8.54%, an increase of 1.77pct over the same period last year, and the quality of operation was significantly improved. 2022Q1 revenue increased significantly compared with the same period last year, mainly due to the company speeding up the progress of project implementation, completing the acceptance of a number of Xinchuang and commercial secret projects and the delivery of security products.
Comprehensive development of the five major businesses, continuous breakthroughs in multi-industry applications: in 2021, the company vigorously developed five major businesses: data security, basic security, network security, security applications and security services, to achieve breakthroughs in many industries. The company and Century Huatong have landed the first data security benchmarking project under the Internet game scene in the game data field; the car networking business secret application demonstration project has been selected into the pilot list of the Ministry of Industry and Information Technology; to achieve the wide application of low-power security chips in the Internet of things terminal; Orange News mobile security application platform covers e-government, public security bureau, procuratorate, court, finance, energy and other key industries. China's first set of new energy centralized control commercial password endogenous security system has been successfully applied, continuously breaking through the new industry field.
Around the new strategic positioning, high-quality transformation can be expected in the future: the company puts forward the new strategic positioning of "data intelligent security service provider with password as the core". With the goal of "building the first brand in the field of data security", 2022 will become a key year for high-quality development and transformation. In the future, the company will, on the one hand, further consolidate the dominant market of the party and government, comprehensively carry out product innovation and upgrading, and rapidly expand the application needs of the commercial password market in finance, energy, transportation, telecommunications, Internet and other industries; on the other hand, deeply explore the policy compliance and endogenous transformation needs of Internet enterprises for data security and security services, and create a new growth level for the company's high-quality development guided by market demand.
Profit forecast and investment rating: we maintain the company's 2022-2023 EPS forecast of 0.38 EPS 0.49 yuan, 2024 EPS of 0.64 yuan, the current market capitalization corresponding to 2022-2024 PE is 94-72-55 times. As a national team in the field of domestic information security, the company ploughing password technology will fully benefit from the landing of personal information protection and other relevant policies in the Internet and other industries, and is expected to continue to obtain resource docking and strong support from the group in the future. Maintain a "buy" rating.
Risk hint: the competition in the industry intensifies, the promotion of commercial secrets falls short of expectations, and the policy progress falls short of expectations.