Introduction to this report:
The pace of confirmation by Xinchuang had a great impact on the pace of the company's performance. The revenue share in the first quarter was usually low, and the impact on the annual performance was small; the company's chairman and directors greatly increased their holdings, demonstrating confidence in the company's annual performance.
Key points of investment:
Maintain the “increase in holdings” rating and maintain the target price of 28.58 yuan. We maintain our profit forecast. We expect the company's EPS to be 0.84, 1.17, and 1.53 yuan respectively in 2022-24, maintaining the target price of 28.58 yuan, corresponding to 34 times PE in 2022.
The first-quarter results were in line with expectations, and the low share of revenue had little impact on the business throughout the year. The pace of confirmation of Xinchuang's business had a great impact on the pace of the company's performance. Out of the 2021Q1 company's 149 million dollars in revenue, we estimate that about 75 million middleware revenue came from the postponement of Xinchuang's business in 2020, while 202Q1 had almost no postponement from 2021, and compounded by the 202Q1 epidemic repeatedly had a phased impact on new orders, and the company's revenue declined to a certain extent. Since the company's downstream customers are mainly the government and large enterprises, the revenue is clearly seasonal, and the share of Q1 revenue is usually low. We believe that the decline in Q1 “off-season” revenue will have little impact on the business throughout the year.
The chairman and director have greatly increased their holdings, demonstrating confidence in the annual results. Mr. Huang Yongjun, the chairman of the company, and Mr. Xu Shaopu, the director, plan to increase the company's stock holdings with his own capital within 6 months from May 5, 2022. The total amount is no less than 30 million yuan, no more than 50 million yuan. There is no price premise for this increase in holdings, and there is no reduction in the holdings of the increased stock holdings within 6 months after the increase is over. We believe that the company's executives have made great efforts to increase their holdings of the company's stock this time, which shows confidence in the company's performance throughout the year.
The general trend of Xinchuang does not change, and the future development of leading domestic middleware companies is expected to exceed expectations. In 2021, the company maintained a significant leading position in market share in Dang, Government, and Credit Innovation and Financial Credit Innovation. In 2022, as Party and Government Credit Innovation deepened into e-government, the investment ratio of financial innovation and innovation more than doubled, and the development of credit innovation in telecommunications, energy and other industries, the company's performance development is expected to exceed expectations.
Risk warning: Xinchuang falls short of expectations, fixed growth progress falls short of expectations, product development falls short of expectations