Event: on January 30, the company issued a 2022 performance forecast. In 2022, the company expects to achieve a net profit of RMB441-471 million (an increase of 123.78% Mel 139.01% over the same period last year) and deducts a non-net profit of RMB0.70-100 million (an increase of 143.31% Mel 161.87%).

The reason for the sharp increase in net profit compared with the same period last year: the substantial increase in net profit from the return of the company is mainly due to the growth of operating profit, deducting the reasons for the substantial increase in non-net profit: 1) the company's industrial digitization and financial digitization business has grown rapidly and stepped to a new level, driving the company's overall business to maintain growth under the epidemic. With the further maturity of independent products and the healthy and stable development of traditional pan-ERP business and IT outsourcing business, the overall operating health of the company has entered a period of upward repair. 2) some of the associated enterprises are in the period of rapid development and investment, and the losses are relatively large. As the company continues to dispose of the shares of the associated enterprises, the overall loss transmitted from the associated enterprises has been reduced. The company's non-recurrent profit and loss in 2022 was basically the same as the same period last year, about 371 million yuan, mainly because the company lost a significant impact on the former associated enterprises during the reporting period, which was divided into investment income generated by financial assets accounting; and the company received financial support funds from the registered area.

Emerging businesses are growing rapidly and gross margins are expected to continue to rise. From a few years ago, the company began to actively transform, conforming to the market trend and focusing on the development of industrial digitization and financial digitization business. at present, it has changed from a simple ERP implementation service provider to a digital integrated service provider more in line with the market needs of large enterprises. In the first three quarters of 2022, the revenue of emerging businesses (industrial digitization + financial digitization) reached 1.063 billion yuan, an increase of 30.34% over the same period last year, and the proportion of revenue also increased to 47.65% from 39.88% in the same period last year. The company seizes the market opportunities and expects the emerging business to continue to grow rapidly. In the first three quarters of 2022, the company's gross profit margin increased 6.87pct compared with the same period last year. With the continuous improvement of emerging business maturity, the company is expected to further increase its gross profit margin in 2023 and continue to enhance its profitability.

2023 is something to look forward to. Compared with the company's three-quarter report in 2022, in the fourth quarter alone, the company is expected to achieve a net profit of-29 million yuan, down 100.63% 85.25% from the same period last year, and the company's 2022Q4 revenue is expected to be basically the same as the same period last year. We believe that the main reason why the company's 2022Q4 is slightly lower than expected is that the epidemic has affected the progress of project implementation and delivery, and looking forward to 2023, the constraints of epidemic control will be eliminated; the growth of emerging business will accelerate, while the company's overall gross profit margin will increase; and the company's performance in 2023 should be expected under such factors as the reduction of transmission losses of associated enterprises.

Investment suggestion: the company's revenue from 2022 to 2024 is expected to be 30.36,36.49 and 4.456 billion yuan respectively, with year-on-year growth rates of 8.01%, 20.20% and 22.12% respectively, and the net profit of returning home is 4.57 yuan, 2.85 yuan and 454 million yuan respectively, corresponding to 0.52,0.32,0.51 EPS in 2022-2024, and 20,32,20 PE respectively. Maintain a "buy" rating.

Risk hint: the risk that emerging business does not advance as expected and the market competition intensifies.