Events:
The company released its three-quarter report in 2022, with operating income of 1.388 billion yuan in the first three quarters, an increase of 12.64% over the same period last year; net profit of-254 million yuan, down 738.42% from the same period last year, and net profit of-278 million yuan, down 450.81% from the same period last year.
Comments:
Q3 income growth accelerated. The company's Q3 realized operating income of 553 million yuan, an increase of 20.23% over the same period last year, which is significantly better than the negative growth of Q2 revenue over the same period last year. The net profit of Q3 is-38 million yuan, up 0.75% from the same period last year, while the net profit of non-parent is-55 million yuan, down 16.82% from the same period last year. We believe that the improvement in the profit side of the company in the third quarter benefited from the rebound in Q3 revenue growth.
Gross profit margin fell year-on-year but improved month-on-month. The company's gross profit margin in the first three quarters was 60.71%, a decline of 7.16pct compared with the same period last year. We think it is mainly related to the adjustment of the company's revenue structure: on the one hand, according to the company's semi-annual report, the growth rate of the company's security services is faster than that of the safety products, and the company's security services gross profit margin has dropped more sharply than the same period last year. On the other hand, according to the company's announcement, the company's hardware costs and delivery inputs increased in the first three quarters, which we believe may be related to the mismatch between some project revenue recognition and cost occurrence time. Considering that the company's Q3 gross margin has shown a month-on-month improvement trend (higher 3.96pct than Q2), we expect the company's gross margin to increase further with the increase in Q4 revenue recognition.
The growth of expenses shows a slowing trend, and the investment focuses on the sales side. The total year-on-year growth rate of the company's three major expenses from Q1 to Q3 is 49%, 22%, 14%, respectively, and the growth rate continues to decline. Among them, the year-on-year growth rate of sales expenses is 50.36%, 5.59%, 26.56%, respectively, and the growth rate of R & D expenses is 62.14%, 52.38%, 2.53%, respectively.
Overall, we expect Q4 revenue growth to be maintained and profits to improve as expense growth slows further.
Considering that the pace of revenue growth in the first three quarters of the company is slower than that of the same period last year, while the growth of expenses shows a decelerating trend, we adjust our previous profit forecast. The company's revenue for 22-24 is expected to be 3.331 billion yuan (3.913 pounds), (the original forecast is 3.209 pounds), and the net profit is 4.637 million yuan (originally forecast 5.32 million yuan). Maintain a "buy" rating.
Risk tips: repeated epidemic situation has affected business development; core technical brain drain; macroeconomic impact on the decline in downstream procurement demand; increased competition in the industry and other risks
