Green Alliance Technology 3Q22 performance is in line with our expectations
Green League Science and Technology announced 3Q22 results: revenue in the first three quarters of 2022 was 1.39 billion yuan, an increase of 12.6% over the same period last year, with a net loss of 250 million yuan. In a single quarter, the income in the third quarter was 550 million yuan, an increase of 20.2% over the same period last year and 9.0% month-on-month, with a net loss of 38.42 million yuan, in line with our expectations.
Trend of development
The expansion of new technologies and new fields has been accelerated, and the gross profit margin has improved significantly in a single quarter. Based on the steady development of original security products, the company actively laid out the field of cloud native security, and recently launched China's first native cloud intrusion and attack simulation platform (Green League CNBAS); in October 22, the company was shortlisted in the list of suppliers of Unicom's intelligent security terminal guards, demonstrating the company's host security and container security protection strength. At the same time, in September 22, the company officially released the "Digital Lake" privacy computing platform, which covers three core capabilities of private computing: federal learning, secure multi-party computing and trusted execution environment. Improve the security level of industry customer database in the fields of finance, operators, health care, science and education. We believe that the company's layout in new technologies and new areas is expected to provide a driving force for the company's long-term growth. At the gross margin level, the gross profit margin in the first three quarters is year-on-year-7.2ppt to 60.7%-7.3ppt to 61.8%, month-on-month + 4.0ppt.
The single-quarter net profit achieves marginal repair. The net loss rate of homing in the first three quarters was 18.3%, which increased by 15.8% compared with the same period last year. The net loss rate of homing 3Q22 was 6.9%, narrowing 1.5ppt and 12.9ppt compared with the same period last year.
In the first three quarters, the company's sales / R & D / management expenses increased by 23.8% compared with the same period last year. The rate of sales / R & D / management expenses in the first three quarters was 41.2%, 31.0% and 10.6%, which increased by 3.7%, 4.0%, 0.6 pptX, + 26.6%, 2.5%, 20.9% and 5.8%, respectively. In the first three quarters, the company had a net operating cash outflow of 110 million yuan, an increase of 653% over the same period last year, including annualized accounts receivable turnover days (193days) and accounts payable annualized turnover days (231days) compared with the same period last year. Inventory turnover days (106days) + 19 days compared with the same period last year.
Profit forecast and valuation
Considering that it will take time for customer demand to recover, we cut the revenue of 2022Universe by 8.5% from 16.9% in 2023 to 3.74 billion RMB in 2023. Due to the company's focus on cost reduction and efficiency, profits are expected to improve, and we maintain basically the same 2023 homing net profit forecast. The current share price corresponds to a price-to-earnings ratio of 21.2 times 2023 / 17.8 times 2023. Taking into account the repair of sentiment in the sector, maintain an outperform industry rating and a list price of 12.20 yuan, corresponding to 23.5 times 2022 price-to-earnings ratio and 19.8 times 2023 price-to-earnings ratio, which has 11.0% upward space compared with the current stock price.
Risk.
The expansion of new products is not as expected, and the demand of downstream customers is not as expected.
