Incident: On April 19, the company released its 2022 annual report. It achieved annual revenue of 282 million yuan, an increase of 19.20% over the previous year; achieved net profit of 101 million yuan, an increase of 21.01% over the previous year; net profit after deducting non-return mother was 0.3 million yuan, a decrease of 88.65% over the previous year; basic earnings per share were 0.59 yuan/share, an increase of 20.41% over the previous year. The performance was in line with expectations.
The main business grew steadily, and profit margins declined slightly
During the reporting period, revenue from the cloud computing equipment and new firmware business was 151 million yuan, an increase of 12.83% over the previous year; the gross profit margin was about 50.12% due to rising R&D personnel costs; the cloud service business revenue was 121 million yuan, an increase of 21.58% over the previous year; and the gross profit margin was 52.77%. The overall gross profit margin was 51.11%, down 1.71 pct from the previous year; the net sales margin was 16.48%, down 1.36 pct from the previous year.
The full implementation of the new firmware framework platform may benefit from the company's R&D expenses of 91 million yuan during the reporting period of Xinchuang Acceleration, an increase of 71.25% over the previous year, accounting for 32.37% of revenue.
The company's self-developed firmware framework platform Baiao BYOCore 2.0 was fully commercialized, supporting all mainstream international and domestic Xinchuang CPUs and downstream complete machine products. Currently, the company's BIOS products equipped with this firmware platform have been applied to domestic chips such as Haiguang, Kunpeng, Zhaoxin, Feiteng, and Longxin. Since the BIOS industry adopts a model combining service and licensing, the BIOS industry has a high marginal profit margin. Benefiting from the increase in the penetration rate of Xinchuang servers, the company's firmware-related business may continue to benefit.
Profit Forecasts, Valuations, and Ratings
We expect the company's revenue in 2023-2025 to be 384/5.29/688 million yuan respectively (the original value of the 23-24 difficulty was 423/599 million yuan), and the corresponding growth rate was 36.00%/38.00%/30.00% respectively; Guimu's net profit was 0.63/0.93/149 million yuan (the original value in 23-24 was 100/167 million yuan), and the corresponding growth rate was 23.90%/47.81%/59.59%, respectively; EPS was 0.73/1.07/1.71 yuan/1.71 yuan/share, 3 The annual CAGR is about 42.97%, and the corresponding PE is 118x/80x/50x. Given that the company is a leader in domestic BIOS firmware and has a stable market position, it is recommended to keep an eye on it.
Risk warning
Systemic risk, the demand of large downstream customers falls short of expectations, and market competition increases the risk.