At a high base, revenue fell 47.3% in the first quarter of 2022 from a year earlier. Dongtong released its quarterly report for 2022 on the evening of April 26. 22Q1 realized revenue of 79 million yuan, down 47.3% from the same period last year, and realized net profit of-47 million yuan, compared with 25 million yuan in the same period last year.
From a historical point of view, the proportion of revenue in the first quarter is relatively low, and 21Q1 has occasional factors. Dongfang Tong's revenue in the first quarter of 2022 was 79 million yuan, down 47.3% from the same period last year. The company's main customers are concentrated in government and enterprises, operators, finance, etc., and general projects focus on the recognition of revenue in the second half of the year, superimposing the Spring Festival and other factors, so the revenue in the first quarter is usually relatively low. 2021Q1's revenue reached an all-time high of 149 million yuan, mainly due to the postponement of some 2020 orders to 21Q1 recognized revenue. Under the high base factor, 22Q1's income growth is under pressure as a whole.
The significant growth of the chairman and the CFO demonstrates the confidence of the management. The company issued an announcement to increase its holdings at the same time as the first quarterly report. Huang Yongjun, chairman of the company, and Xu Shaopu, deputy general manager, financial director and secretary of the board, planned to increase the holding of the company, with a total amount of 3000-50 million yuan. The large-scale increase of management's holdings shows their confidence in the future development of the company.
Financial credit is expected to create a boom, and digital business is in the ascendant. 2022 is expected to become the first year of industry Xinchuang, the industry-level construction of Xinchuang with financial institutions as the vanguard is worth looking forward to, and the sinking of government Xinchuang is also expected to bring new opportunities. The company's middleware business income in 2021 was 333 million yuan, an increase of 23.6% over the same period last year. If the industry with a broader market space is promoted by Xinchuang, the company's middleware business will be greatly promoted. On the other hand, the company's non-innovation business achieved rapid growth in 2021, and the income from security products, intelligent emergency response, and digital transformation of government and enterprises was 2.4,1.6 and 120 million yuan respectively, representing a year-on-year growth rate of 30%, 68% and 43%, respectively. The combined proportion of income has reached 61%. The company's non-basic software business mainly includes three major areas: information security, intelligent emergency and digital transformation, all of which are the key areas for the construction of downstream customers under the digital economy.
Issue equity incentives and set high growth targets. Dongtong issued an announcement on the evening of April 27 to launch the stock option incentive plan. The number of stock options to be granted is 16.875 million, accounting for 3.68% of the total share capital. The incentive targets are two deputy general managers, qu Tao and Zhang Chunlin, as well as the remaining 260core backbone. The performance unlocking condition is that the net profit in 2022 and 2023 is not less than 3.75 yuan and 500 million yuan respectively. The net profit of the company in 2021 is 248 million yuan, and the unlocking conditions of the equity incentive plan give higher performance growth guidance, which once again reflects the confidence of the management of the company in the future.
Investment suggestion: we estimate that the net profit of 22-24 homing will be 395 million yuan, 552 million yuan, respectively, a year-on-year growth rate of 59.2%, 39.8% and 33.5%, respectively. The current stock price corresponds to 22-24 PE, which is respectively times that of 17-12-9. The company is a domestic middleware leader, has achieved middleware + network letter two-wheel drive, taking into account the high growth of the company, as well as the potential market space brought by the industry Xinchuang in 2022, maintain the "recommended" rating.
Risk hint: the localization process of middleware is not as expected; the market competition is intensified; the demand of network letter service fluctuates seasonally.
