Brief performance review
On March 30, 2023, the company released its 2022 annual report. It achieved annual revenue of 320 million yuan for the whole year, a slight decrease of 1.5% over the previous year, mainly due to the impact of the epidemic on delivery and acceptance. Fumo achieved net profit of 150 million yuan for the whole year, a decrease of 45.5% over the previous year, mainly due to a sharp reduction in the fair value of some investment products; net profit of non-return mothers was 210 million yuan for the whole year, a decrease of 10.8% over the previous year, mainly due to increased R&D investment and labor costs.
Management analysis
With the reform of national secrets and the implementation of a comprehensive registration system, B-side has the momentum for continuous growth. In '22, the company's B-side revenue was 250 million yuan, a year-on-year decrease of 5.8%. Mainly due to the impact of the epidemic, some of the company's projects were unable to enter the market, causing delays in project settlement and collection. The company will benefit from the continuous implementation of the national secret reform and the promotion of a comprehensive registration system in 23-24. Since the national secret reform is an incremental business, it is expected to boost revenue growth; furthermore, it is expected that the company's non-net interest rate will be increased compared to the standards of the national secret and comprehensive registration system reforms. After 24 years, it will mainly benefit from the innovation and transformation of trading and market information systems, and the expansion of data center business, Al Empowering+APP's monthly activity, and the growth of the C-side business is expected to accelerate. The company's securities information service revenue in '22 was 70 million yuan, an increase of 23.0% over the previous year. During the reporting period, the company increased its C-side business development efforts and Al project investment. The annual R&D investment reached 707.92 million yuan, an increase of 33.2% over the previous year. The annual R&D expenditure rate reached 22.0%, an increase of 5.7 pct over the same period last year. Currently, the company has launched Al products such as Ask Xiaoda and Xiaoda Smart Writer, which can support functions such as intelligent financial Q&A, automatic data capture, automatic text analysis, and extraction of key information. Furthermore, according to Yiguan Consulting statistics, the monthly activity CAGR of the company's 2020H1-202H1 mobile app reached 24.8%. Taking advantage of this round of Al technology iteration, the company's product functions are expected to be further improved, driving a continuous increase in the number of C-end users and payment rates. The company failed to pay principal and interest on 3 debt investment products in 2022, with a total amount of 100 million yuan. After careful evaluation, the company has reduced the fair value of this part of its investment products to 0, which has little impact on subsequent net profit.
Profit forecasting
According to the annual report issued by the company, we adjusted the company's revenue forecast for 2023-2025 to 47/ 58/770 million yuan; adjusted the net profit attributable to the mother from 2023 to 2025 to 3.8/46/ 570 million yuan. The current price of the company's stock corresponding to PE valuation was 32.8/27.2/21.9 times, maintaining the “increase in holdings” rating.
Risk warning
The pace of national secret reform or financial innovation implementation fell short of expectations; development of C-side business fell short of expectations; risk of reduction in the fair value of investment products; risk of lifting the ban.