The company disclosed its 2022 annual report. In 2022, the company achieved revenue of 1,283 million yuan, a decrease of 1.79% over the previous year; realized net profit of 184 million yuan, a decrease of 15.71% over the previous year; and realized deduction of 170 million yuan in non-net profit, a decrease of 16.24% over the previous year. Revenue for the fourth quarter of 2022 was 622 million yuan, down 7.90% from the previous year, and net profit of the mother was 59 million yuan, down 39.38% from the previous year, mainly due to delays in revenue confirmation due to the epidemic in Q4 last year. The company's performance declined for the first time since listing in 2022, mainly due to the overall macroeconomic impact. The implementation and acceptance cycle of project-based software companies was lengthened, the cost side rose, accounts receivable increased, and the company's overall operating performance was affected to a certain extent. In 2022, the company's gross profit margin was 55.24%, down 0.87 pct from the previous year. The sales/management/R&D expenses ratio was 13.43%/9.84%/13.55%, respectively, with a year-on-year change of 0.96/-0.14/0.93pct. The overall cost rate was controlled at a reasonable level.

Health insurance informatization reform will accelerate revenue recognition in 2023. Since the release of the three-year action plan for DRG/DIP reform, the company has won bids for several Dizhou Health Insurance Administration projects and successfully launched them.

In 2022, the company vigorously promoted the hospital-side DRG/DIP project and achieved breakthroughs in many regions. It is expected that the health insurance payment method reform will continue to advance steadily in 2023.

Companies will benefit greatly from data element policy changes. Data trading markets have been established all over the country, and the importance of data elements has now risen to the height of national strategy. Various departments of the country have introduced a number of regulations to promote the implementation and development of data elements. The company's main business is to provide government informatization services to government departments. A large amount of information-based data has been accumulated in industries such as human resources, health insurance, medical care, and civil affairs. In terms of big data application services, the company also has a breakthrough in the “Golden Health Insurance” model and promoted the “Direct Commercial Insurance Claim Express Claim” application scenario with local commercial insurance companies, which is expected to greatly benefit from data factor policy changes.

[Investment advice]

The company's market share in the medical and health insurance informatization field occupies a leading position in the industry. It has cooperated with the Health Insurance Administration, the Ministry of Human Resources and Social Affairs, the Ministry of Civil Affairs and other departments to build informatization for a long time. Its competitive advantage is obvious, and it is actively expanding more markets in the field of medical informatization. Due to overall economic fluctuations and changes in industry policies, we adjusted our forecasts for the company's performance. The company's estimated revenue for 2023-2025 was 1,537, 1,789, 2,053 billion yuan, net profit attributable to the parent company was 241, 323, 403 million yuan, EPS was 0.59, 0.79, 0.99 yuan, and the corresponding PE was 44.37, 33.12, 26.52 times, maintaining the “buy” rating.

[Risk Reminder]

The promotion of health insurance informatization fell short of expectations;

Increased competition in the market;

Government spending fell short of expectations.