Key points of investment:
Event: The company released the 2022Q3 performance report. In the third quarter of '22, the company achieved operating income of 553 million yuan, an increase of 20.23% over the previous year; the net profit attributable to shareholders of listed companies was -384.198 million yuan, which is basically the same as the same period in history. In the first three quarters of '22, the company achieved cumulative revenue of 1,388 million yuan, an increase of 12.6% over the previous year; the cumulative net profit of the mother was 254 million yuan. The performance was in line with expectations.
Q3 performance rebounded sharply, and gross margin improved month-on-month; expenses increased steadily, and R&D fee control effects were obvious. Under the influence of the external environment, the company achieved a 20.23% increase in revenue in the third quarter, fully demonstrating the company's resilience.
In Q3, the company achieved a gross margin of 61.79%, an increase of 3.96 pct over Q2. Q3 The company's sales and management expenses increased 26.56% and 20.92% year-on-year. The company's R&D expenses fell 2.53% year-on-year. The effect of controlling fees on the R&D side was obvious, and the overall investment and expenditure favored the sales side.
Operating cash flow improved, and notes receivable were drastically reduced compared to the beginning of the year. Q3 The company's net operating cash flow increased 31.29% year over year, and quarterly repayment results were good. The company's operating cash flow fell 653% year-on-year in the first three quarters. This is due to the company's increased investment in markets, R&D, etc., and personnel expenses increased. Notes receivable at the end of the third quarter decreased by 37.6% compared to the end of the year 21, and operating efficiency improved dramatically. At the same time, inventory increased by 37.71% year on year. It is expected that the company will carry out early inventory in response to external supply chain disturbances.
Products and channels are in place, and 22H2 performance is expected to rebound. In terms of products, 22H1 released Green League Technology's T-ONE CLOUD solution, which uses cloud security capabilities as the foundation, the new product Magic Firewall as the core capability, and subscriptionable capabilities such as vulnerability scanning, database auditing, log auditing, and intrusion prevention, to provide customers with on-demand subscription, flexible deployment, and multi-cloud management solutions. While promoting the company's advancement in the field of cloud security, it can better meet the flexible security needs of SME customers. In terms of channels, the company's cooperation with the new president of Shenzhou Digital continues to deepen, and customer expansion, new orders, and repayment capabilities are expected to be gradually reflected in 22Q4.
The 23-24 revenue forecast was revised, the 22-24 profit forecast was lowered, and the “buy” rating was maintained. The estimated revenue for 2022-2024 is 3184, 39.56 billion yuan, and 5.012 billion yuan respectively (the original forecast was 31.84, 3935, 4.988 billion yuan, and the growth rate of security software is expected to resume next year, and the growth rate of security software will increase from 20% to 25% next year). The estimated net profit for 2022-2024 will be 3.65, 4.53, and 600 million yuan respectively (originally estimated at 419, 519, and 648 million yuan. The reason for the decrease is 3pct in 22-24 and 5pct in 23 ), the corresponding PE is 24, 19, 15X. The “buy” rating was maintained because the external environment lowered the forecast but was optimistic about the company's long-term development.
Risk warning: The development of the information security industry fell short of expectations, and the implementation of security information innovation was slow.
