Incident: On April 18, the company released its 2022 annual report. The annual revenue was 905 million yuan (YoY +21.91%), and the mother's net profit was 114 million yuan (YoY +24.26%). The annual results were in line with expectations.

Performance has been growing steadily, and the social services business has exploded dramatically. By product, the company's various businesses performed excellently. The “One Card and AIoT Application” achieved revenue of 698 million yuan (YoY +23.23%). At the same time, “social operations and big data services” achieved a sustainable breakthrough. This type of business revenue reached 165 million yuan (YoY +149.12%), reflecting the company's leading advantage in the field of digital livelihood services.

Judging from the contract amount, throughout 2022, the amount of new contracts signed by the company's main operating contracts increased by more than 30% over the same period last year. We believe that the differentiated model created by the company through its “data base+platform and scenario” has a clear lead in the industry. It is expected that it will continue to expand new markets for digital data services through the industry channel barriers built by its “one-card” card, leading to further growth in performance.

Social security cards have entered the peak issuance period to guarantee a basis for annual performance growth. In recent years, the country has vigorously promoted the establishment of a one-card service management model using social security cards as the carrier, and promoted the release of three generations of social security cards. By the end of 2022, the number of social security card holders nationwide reached 1,368 million, with a penetration rate of 96.8%. Among them, the number of third-generation social security card holders reached 267 million, and there is still room for penetration by nearly 1.1 billion people. Among them, in 2022, the company issued about 36 million cards throughout the year, and sales revenue increased nearly 64% year-on-year. In the short term, the replacement of second-generation and first-generation social security cards with third-generation social security cards will lay a solid foundation for the company's performance growth over the next year or two.

Using the one-card as the basis, open the second growth curve for data services. The data comes from “people” and serves “people”. The large-scale application of the card will generate a large number of data assets based on “people” consumption scenarios. Taking advantage of the opportunity of upgrading the social security card to a “one-card” service for residents, the company first launched a digital service system empowered by big data, and promoted the application of the “one-card” residents' service in scenarios such as employment, social security, medical care, social security, transportation, and cultural tourism through horizontal expansion and depth.

Up to now, the company has helped 150+ cities to build digital livelihood services, and built a multi-level, multi-domain, multi-department linked, flexible and efficient service system. As the company continues to explore the data service circuit and continues to promote data element policies, relevant business prospects can be expected.

Profit forecast and investment advice: The company's revenue for 2023-2025 is 1,387 billion yuan, 1,728 million yuan, 2,097 million yuan, net profit of the mother is 223, 279 and 346 million yuan, and EPS is 0.72, 0.90, and 1.12 yuan/share, maintaining the “increase in holdings” rating.

Risk warning: The progress of issuing social security cards fell short of expectations, and the expansion of the data business fell short of expectations