The event company released its quarterly report for 2022. 2022Q1 realized revenue of 78.7831 million yuan, year-on-year increase or decrease of-47.30%, net profit of-46.9442 million yuan, year-on-year increase or decrease of-289.49%, and net profit of deduction of non-return net profit of-49.58 million yuan, up or down-679.14%.
22Q1 performance is affected by seasonal fluctuations superimposed by COVID-19 epidemic factors, contract signing and operating income recognition are greatly affected. The company's 2022Q1 performance has changed from profit to loss compared with the same period last year, on the one hand, because the company's customer base is mainly from the government, telecom operators, finance, transportation and other fields, and affected by its adopted budget management system and centralized procurement system, the company's operating income has always shown obvious seasonal characteristics, mainly concentrated in the second half of the year, especially in the fourth quarter. On the other hand, affected by the COVID-19 epidemic in the first quarter, the company's government and enterprise customers stopped production or postponed the resumption of production, and the pace of bidding and contract procurement processes slowed down significantly or even stagnated, resulting in a sharp decrease in the company's contract signing compared with the same period last year. the original order was delayed, at the same time, the epidemic affected the progress of the order-on-hand process in the past, and delayed delivery and acceptance. It has a negative impact on the recognition of the company's operating income in the first quarter.
The 2021 annual report shows good revenue growth, a large increase in the rate of sales expenses, and sustained high R & D investment. In 2021, the company achieved revenue of 863 million yuan, an increase of 34.80% over the same period last year; net profit of 248 million yuan, an increase of 1.53% over the same period last year; and net profit of 221 million yuan, an increase of 31.89% over the same period last year. During the reporting period, the company's gross profit margin was 76.96%, down 2.98 pct from the same period last year; the expense rate during the period was 53.42%, up 1.40 pct from the same period last year; and the net operating cash flow was 255 million, up 106.95% from the same period last year. The company has maintained high R & D investment for a long time, with R & D investment of 243 million yuan in 2021, an increase of 20.52% over the same period last year, accounting for 28.12% of revenue. In addition, the company's sales expense rate was 21.43%, a sharp increase in 7.45pct compared with the same period last year, mainly due to the expansion of the company's sales scale during the reporting period, efforts to open up the market, and the construction of a nationwide marketing network.
The performance of non-basic software business is eye-catching, and Xinchuang business still has great potential for growth. In 2021, the company's non-basic software business achieved rapid growth, that is, security products, intelligent emergency response and government-enterprise digital transformation business increased by 30.02%, 67.94% and 42.68% respectively compared with the same period last year, and the total revenue has reached 61%. The company has created two major product systems of "data +" and "security +", and uses the "Wisdom +" strategy to guide the digital transformation of government and enterprises. as of December 31, 2021, the company's products and solutions have widely served thousands of domestic industries and related business fields, with more than 5000 enterprise-level users and more than 2000 partners in telecommunications, finance, government, energy, transportation and other industries.
The increase of senior executives' holdings shows confidence in development. On April 26, Mr. Huang Yongjun, the actual controller, chairman and general manager of the company, and Mr. Xu Shaopu, director, deputy general manager, chief financial officer and secretary of the board of directors, planned to increase the company's shares with their own or self-raised funds within 6 months from May 5, 2022, with a total increase of no less than RMB 30 million and no more than RMB 50 million. The purpose of this increase is based on confidence in the company's future performance and the long-term investment value of the company's shares, in order to better promote the sustained, stable and healthy development of the company, and maintain the stability of the capital market and the interests of the company's investors.
Investment suggestion Dongfang Tong, as the leading manufacturer of domestic middleware, has achieved a dominant position in the party and government, telecommunications, finance and other fields, the industry innovation process is affected by the epidemic, but does not change the long-term growth space, the company still has great potential for growth. At the same time, the development of cloud computing and digital economy will also bring new incremental opportunities for the company, and the company's non-basic software business is growing brightly. However, because the 2022Q1 COVID-19 epidemic has affected the company's new order signing and delivery acceptance, and the cut-off time of this factor has not yet been confirmed, we predict that the company's EPS from 2022 to 2024 will be 0.901.201.58 yuan, corresponding to PE 16.62,12.399.44.
Maintain the recommended rating.
The risk indicates the continuing risk of the COVID-19 epidemic. The risk that Shinchuang's progress is not as expected. The risk of falling prices as a result of fierce competition in the market.