Leading domestic cryptographic security and maintaining a “buy” rating
Considering the company's increased investment, we lowered the company's net profit forecast for 2023-2024 to 2,27,301 million yuan (the original forecast was 265.336 million yuan), the 2025 forecast was 376 million yuan, EPS was 1.64, 2.19, 2.73 yuan/share, and the current stock price corresponds to PE 27.2, 20.5, 16.4 times. As a leader in cryptographic security, the product line continues to expand. We are optimistic about the company's development prospects and maintain the “buy” rating.
Performance is under pressure in the short term without changing the long-term positive trend
The 2023Q1 company achieved operating income of 51.6665 million yuan, a year-on-year decrease of 19.29%; it achieved net profit of 32.5718 million yuan. The decline in the company's revenue was mainly due to the influence of the pace of revenue recognition, while the 2022 Q1 base was higher. Net profit declined significantly, mainly due to the increase in the number of employees and remuneration, and the rapid increase in expenses caused by the calculation of equity incentives for share payments. Furthermore, the company's gross margin was 73.57%, an increase of 0.87 percentage points over the previous year.
Continuously consolidate its market advantage in the big finance sector and actively seize market opportunities in more industries. On the one hand, the company relies on bank customer and product accumulation to quickly enter pan-financial industries such as securities and insurance, and continues to consolidate its leading edge in the big finance field. On the other hand, with the implementation of laws and regulations such as the “Cryptographic Law” and the “Regulations on the Administration of Commercial Cryptography (Revised Draft)”, demand from various downstream industries has increased. The company has strengthened in-depth exploration of industries with strong research and technology capabilities and a good foundation for cryptographic promotion, such as transportation, public security, government affairs, aviation, radio and television, tobacco, etc., and is expected to achieve faster development.
Increase investment in R&D and actively lay out emerging safety fields
With the growth of the company's R&D capabilities, the company's products have expanded from the field of cryptographic security to the field of cybersecurity.
Under the development trend of internetization, mobility and cloud-based information technology, the company has formed six major product lines for identity security, communication security, data security, mobile security, cloud security, and platform security, and has actively deployed application security products in the fields of Internet of Vehicles security, Internet of Things, and industrial Internet security.
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