Event: the company released a report for the third quarter of 2022, with revenue of 2.23 billion yuan in the first three quarters, down 11.8% from the same period last year, and net profit of-320 million yuan, down 970.8% from the same period last year. In the split quarter, the company's Q3 realized revenue of 1.1 billion yuan, an increase of 41.4% over the same period last year, and realized net profit of-99.814 million yuan, a decrease of 1,088.8% over the same period last year.
The project did recover quarter by quarter, and the cost was dragged down by the epidemic. On the revenue side, the main camps of H1 company were seriously affected by the epidemic in 2022, and the implementation and acceptance of some projects basically stagnated, but the development of the national market was fruitful, and the overall newly signed contracts increased by 4.4% compared with the same period last year. With the continuous progress of returning to work and production, a large number of projects of the company have been confirmed in Q3, and the annual income is still expected to maintain positive growth. On the profit side, the company's comprehensive gross profit margin in the first three quarters was 25.4%, a year-on-year decline of 9.79pp, mainly due to the lengthening of the overall cycle of the project and an increase in the scale of investment than expected. at the same time, as a key protection unit for epidemic prevention in Shanghai, the company immediately sent a large number of technical backbones to the commission bureaus at all levels to carry out system operation and maintenance, increased manpower and material resources, and increased project ownership costs. We believe that the most difficult time for the company may be over, and the follow-up fees and costs are expected to return to normal operating levels and continue to improve with the optimization of management measures.
Xinchuang project has rich experience and deeply benefits from the process of localization. Industry Xinchuang continues to accelerate to many fields, and the medical IT system will focus on domestic migration in the next 3-5 years. As an important ICT service manufacturer in China, the company has a lot of project experience and mature solutions in data migration, application migration, and Xinchuangyun, etc. At the same time, it has laid out the system migration work in advance, obtained a large number of compatible certificates, and has obvious first-mover advantages, and the market share is expected to comply with the construction of Xinchuang to further concentrate to the leading enterprises.
The fixed increase project will be landed soon, and the inflection point will increase gradually. The company has passed the examination and received approval, and intends to raise no more than 3 billion yuan, of which about 1 billion yuan is used for public health and medical innovation management services, 890 million yuan for urban wisdom service platform project, 200 million yuan for enterprise human resources digital platform project, and about 900 million yuan for repayment of bank loans. After the landing of Dingzeng, the foundation of many businesses of the company will be further consolidated, which is expected to comply with the arrival of the inflection point of the industry and achieve faster growth.
Profit forecast and investment suggestions: the recent smart medical field is good frequently, information construction is expected to usher in a new round of investment cycle. The company's operating efficiency and profitability have improved significantly in recent years, and the synergy with Guoshou is expected to be further brought into play, and is optimistic about the continuous progress of the "32nd" business segment; however, considering that the recent epidemic situation has repeatedly affected the delivery progress of some projects, it is recommended to actively pay attention to the follow-up profit elasticity performance and the long-term growth of innovative business such as Bull Health, and maintain the "hold" rating.
Risk hints: policy promotion is not as strong as expected; epidemic situation repeatedly affects project implementation and delivery progress; the synergistic effect of the company and Guoshou may not meet expectations; market competition intensifies.
