Key elements of the report
The company released its 2022 annual report. The company achieved total operating income of 7.526 billion yuan, an increase of 10.98%; net profit attributable to shareholders of listed companies was 827 million yuan, an increase of 0.37% over the previous year; net profit attributable to shareholders of listed companies after deducting non-recurring profit and loss was 682 million yuan, a decrease of 4.79% over the previous year.
Key points of investment:
The leading position in financial equipment continues to be consolidated, and overseas business bucked the trend: the company's fintech business achieved revenue of 4.697 billion yuan, an increase of 11.5% over the previous year. The company has financial Xinchuang full-stack solutions, and many products have passed the Xinchuang adaptation test by the Financial Xinchuang Ecological Laboratory. Benefiting from the digital transformation of the financial industry and the continuous advancement of financial innovation, the company's smart financial equipment was shortlisted for 64 headquarters-level projects throughout the year, ranking first in the domestic smart financial equipment market for 15 consecutive years. Recently, it won another bid for non-cash equipment for the Agricultural Bank Super Counter project, with a project amount of 425 million yuan. Overseas business revenue increased 41.65% year over year, and annual contract amount increased nearly 70% year over year. In 2022 Q4, the company announced the signing of major financial equipment contracts with the largest financial institutions in Turkey and Mexico, respectively. The contract amounts were approximately 196 million yuan and 183 million yuan respectively. The company's brand awareness and market share in the Middle East and Latin America continues to increase, driving the rapid growth of the company's overseas business. The expansion of overseas business will be an important driving force for the company's future performance growth.
Seizing the opportunities of the digital economy, the urban intelligence sector grew steadily: the company's urban intelligence sector reached 2,829 billion yuan, an increase of 10.12% over the previous year. In terms of digitalization of government enterprises, the company implemented a number of benchmark cases in 2022, such as Guangzhou Urban Brain, Guangzhou Artificial Intelligence Public Computing Power Center, Smart State-owned State-owned Enterprise Platform, and Guangzhou Government Cloud Platform. In terms of intelligent transportation, the company won bids for projects such as Guangzhou Metro's 400 million yuan smart security inspection system, Beijing Metro's mobile payment gateway, the face recognition platform for the Changsha Metro network, and the Guangzhou Metro digital yuan payment. The company has set up digital economy investment and operation companies in Shanwei, Maoming, Qingyuan, Jieyang, etc., and is expected to replicate and implement benchmark cases in many cities.
Increased capital to the Guangzhou Data Exchange and actively participated in the marketization of digital factors: In December 2022, the company announced that it would participate in the capital increase of Guangzhou Data Exchange Co., Ltd. After the capital increase, the shareholding ratio reached 10.5%, ranking as the third largest shareholder. Furthermore, the company has now accumulated experience in public data operation in projects such as Urban Brain, and plans to participate in public data operation services and other related work as a big data technology service provider in the future.
Profit forecasts and investment suggestions: The company has won big bids one after another since the fourth quarter, providing a strong guarantee for its performance in '23. According to the company's annual report, based on the current order situation, adjusted profit forecasts, the company's revenue for 2023-2025 is estimated to be 83.83/92.00/10.064 billion yuan respectively, and net profit of the mother is 955/ 10.69/1,179 billion yuan respectively. Corresponding to the closing price PE on April 6, 2023 was 32.58x/29.11x/26.39x, respectively, maintaining the “increase in holdings” rating.
Risk factors: Financial innovation fell short of expectations; marketization of digital data elements fell short of expectations; market competition intensified; technology research and development fell short of expectations; risk of exchange rate fluctuations.