The company released its 2022 annual report. In 2022, the company achieved revenue of 321 million yuan, a year-on-year decrease of 1.49%, a year-on-year net profit of 154 million yuan, a year-on-year decrease of 45.48%, and deducted non-net profit of 212 million yuan, a year-on-year decrease of 10.75%. 22Q4 achieved revenue of 124 million yuan in a single quarter, a year-on-year decrease of 8.93%, and net profit of the mother returned to the mother in the single quarter was 87 million yuan, a marginal improvement was obvious.
Judging from the annual financial data, the decline in the company's revenue was mainly due to a decrease in brokers' business demand and delays in project settlement and collection, which led to a decline in revenue from the securities market trading system and technical support and maintenance revenue compared to the previous period. The reason for the decline in net profit was that the principal and interest of some of the company's investment products were not properly paid, and the fair value of this part of the investment products was drastically reduced in the annual report. Net cash flow from operating activities fell 18.23% year over year, mainly due to delays in project receipt and settlement, increased investment in R&D by the company, and rising labor costs. The gross profit margin of the company's main business in 2022 was 83.80%, a decrease of 2.87 pct from the same period last year. This was mainly due to the company simultaneously increasing the development of the securities information service business on the basis of improving the market position of the securities market trading system and maintaining the service business, which led to an increase in labor costs and information usage fees.
Firmly invest in R&D to help the digital transformation of the securities industry. The company has always been determined to invest in R&D. The total R&D investment in 2022 was 71 million yuan, an increase of 33.24% over the previous year, accounting for more than 22% of the company's total revenue. At the end of the reporting period, the company had 358 R&D personnel, an increase of 84 over the previous year, and R&D personnel accounted for 76.82% of the company's total number. The company's research projects include an industry security monitoring system based on big data, a visual financial research terminal project, an open artificial intelligence platform, and a professional investment and trading platform project. The company proposed full-stack information technology innovation to provide securities companies with integrated solutions based on national secrets, credit innovation, and IPV6 services. The aim is to improve market efficiency through next-generation information technology applications, explore a set of autonomous and controllable fintech application solutions for the industry, and enhance the application of financial security based on technical services such as commercial passwords and Xinchuang.
Research efforts to create an AI+ financial scenario. The company continues to strengthen AI capacity building and continues to conduct in-depth research in AIGC, interactive AI and other fields. Artificial intelligence technology is applied to various aspects such as data production and product development. The company mainly uses NLP, CV and other technologies to automatically capture data, automatically parse text, extract key information, and provide labeling platforms and data comparison platforms to focus on developing Xiaoda's intelligent writer. Ask Xiaoda and other products have developed a series of unique AI functions such as smart financial Q&A and company maps. The company has accumulated technologies such as convolutional neural network models, sequence-to-sequence models, two-way long-term and short-term memory networks, and attention models, which can efficiently complete tasks such as market research, investment, and risk monitoring. The company's continued investment in AI technology will enhance the company's ability to supply products and services. Empowering investors through AI will become an efficient and convenient investment tool. From the demand side, the advent of AI is conducive to supporting user investment research and truly increasing user value. Technological change will change the pattern of industrial supply and demand, help companies continuously improve their position in the industry and enjoy the dividends of the digital and intelligent development of the financial industry.
[Investment advice]
The company is an important supplier of domestic securities market trading system software and securities information services. Over the years, it has continuously invested in technology research and development, and has implemented a series of AI special functions in its products. Technological changes will change the pattern of industry supply and demand, help the company continuously improve its position in the industry, and enjoy the dividends of the digital and intelligent development of the financial industry. We expect the company's revenue for 2023-2025 to be 416/501/626 million yuan, net profit of 2.60/340/424 million yuan, corresponding EPS of 2.79/3.64/4.54 yuan, and corresponding PE of 48/36/29 times respectively, giving it an “increase in holdings” rating.
[Risk Reminder]
Technology research and development falls short of anticipated risks;
Competition in the industry heightens risks;
Policy regulation risks.