Net profit after deducting non-return to the mother in 2022 increased by nearly 50% year-on-year

In '22, the company's total operating revenue of 1,096 million yuan increased 6.69% year on year, net profit of 111 million yuan increased 6.30% year on year, net profit of non-return mother was 140 million yuan, up 46.88% year on year, and net cash flow from operating activities was 223 million yuan, an increase of 51.92% over the previous year.

Looking at the revenue segment, the information services, public safety, and special sectors achieved good growth. In 2022, the revenue of the corporate information services sector of 290 million yuan increased 46.40% year on year, the revenue of the public safety sector of 60 million yuan increased 30.40% year on year, the revenue of the special demand and other sectors increased 65.45% year on year, revenue from the media technology and fintech sector declined somewhat, the revenue of the media technology sector of 328 million yuan fell 21.27% year on year, and the revenue of the fintech industry of 161 million yuan fell 23.89% year on year.

Sales volume in the information service industry increased by 42.13%, and production increased 39%, mainly due to the signing and execution of business orders related to the information service industry during the reporting period, which led to an increase in sales volume. At the same time, in order to ensure order execution, this year's production also increased compared to the previous year; sales of special demand products increased 107.14%, and the software and hardware business involving national information security and customized for special needs continued to expand new customer groups on the basis of maintaining an existing stable customer base.

Q4 The company's revenue in a single quarter was 434 million yuan, an increase of 37.46% over the previous year, and the net profit of the mother was 35.9 million yuan, an increase of 14.69% over the previous year. After deduction, the net profit of the mother returned to the mother was 52.78 million yuan, an increase of 58.58% over the previous year.

Gross margins and profitability remain at a high level

In 2022, the company's gross profit margin was 49.69%, up 0.50 ct year on year, net profit margin was 1.16%, a slight decrease of 0.04 pct year on year, and profitability remained at a good level.

Looking at gross margin segmented, the gross profit margin of media technology remained at a high level of 70.32%, a slight decrease of 0.24 pct over the previous year, the gross profit margin of fintech was 22.40% up 7.78 pct year on year, the gross profit margin of information services increased by 46.40% by 3.00 pct year on year, and the gross profit margin of special demand and other sectors fell 4.23 pct from 67.13% year on year.

Continuously deepening the 4K/8K+5G+AI layout

The company is committed to innovative research and development in the fields of video, 5G, security, AI, etc., and has built leading solutions in the fields of radio and television, communications, emergency safety, industrial Internet, new energy applications and national capacity building.

Media technology industry: Leading market position, directly benefiting from the construction of ultra-high-definition and emergency broadcasting systems. Fully participated in the construction of the existing national Xing 4K program system and the launch of the 4K program, as well as all two domestic 8K channels. Deeply involved in the formulation of national standards, it can provide end-to-end full-link equipment and technical services. As of December 2022, 17 national provincial emergency broadcast platform construction projects were publicly tendered, and the company won 15 bids.

The company has accumulated technology in fields such as AI content production and video enhancement. The company's self-developed core algorithm can improve overall picture effects for damaged video scenes, low-resolution video streams, or video files. The company's transcoding system has achieved dynamic recognition of key areas of the image based on intelligent AI technology to achieve better picture results, and has been applied to the 2022 Sōdai New Media Qatar World Cup broadcast.

Information service industry: Sales of gateways, cameras, CPE and other products to the three major operators and provincial companies, directly benefiting operators' 5G+ ultra-high-definition video and smart home layouts.

Public safety industry: The company is one of the companies with the most comprehensive video security technology and solutions on the market. On the CAS and DCAS side, they provide operators with a transmission link protection market that supports national secret algorithms, and have a number of commercial cryptographic product certification certificates; on the DRM side, as the first manufacturer to pass the ChinaDRM digital watermark security assessment and certification, it has integrated digital watermarking solutions for front-end watermarks and terminal watermarks, and has implemented DRM systems for copyright protection for content such as 4K and conditional reception systems for live streaming content protection.

Investment advice

The policy promotes the construction of ultra-high definition, emergency broadcasting, etc. to accelerate the development of the media technology sector. Optimistic demand in the information services and special sectors is expected to continue to grow well. Actively expanding new scenarios such as AI, the metaverse, and smart cars is expected to open up new growth space. Net profit is expected to return to the mother in 23-25 to 152,05 million yuan, 263 million yuan, PE63 times, 47 times, 36 times, maintaining the “increase in holdings” rating.

Risk warning

The development of the radio and television industry fell short of expectations; the development of the UHD industry fell short of expectations; the company's product market share declined, etc.