Events:
According to the 2013 performance report, the company achieved a total income of 205 million yuan during the reporting period, an increase of 31.88% over the same period last year; the net profit attributed to the owner of the parent company was 46.5 million yuan, up 4.32% from the same period last year; and basic earnings per share was 0.74 yuan. It is proposed to pay a dividend of 2 yuan for every 10 shares.
Comments:
1. The decline in dependence on a single main business is conducive to stable performance, and the surge in inventory indicates that income is good.
During the reporting period, the company's business volume and new contracts increased well, signing sales contracts of 241 million yuan in the whole year, an increase of 36% over the same period last year. Benefiting from the substantial growth in business revenue from risk management systems and system integration, the company's dependence on the largest main business credit management system has decreased, its share of revenue has dropped from 82% in 2012 to 74%, and the business structure has improved. There are 21 new customers, mainly from urban commercial banks (8), agricultural commercial banks and new rural financial institutions (7). At the same time, we are optimistic about the company's 14-year revenue growth for the following reasons: 1) the 87% surge in inventory indicates a significant increase in the contract balance to be confirmed; 2) as new products are launched, the unit price of the product is expected to increase; 3) the increase in accounts receivable is much less than the growth in revenue, indicating an improvement in the quality of income.
2. The decline of gross profit is a drag on profit growth, and the cost of R & D investment period is still high.
The company's profit failed to keep pace with revenue, rising only slightly by 4.3% for the whole year. This is mainly due to: 1) the overall gross profit margin decreased by 5 percentage points due to factors such as higher employee salaries and increased customer customized demand; 2) R & D expenses increased by 47%; 200 new employees were added during the period; 3) the rate of sales expenses increased. We believe that after landing in the A-share market, the company will focus on research and development, including a new generation of credit management system, risk management system, R & D center and other projects will start construction one after another, and the corresponding management and sales expense rates will remain at a high level in the next two years.
3. Give a "hold" rating by taking a look at it.
The company's future endogenous growth will mainly rely on: 1) expansion of existing customer IT demand and product upgrading (including secondary development, etc.); 2) continuous expansion of small and medium-sized bank customers such as private banks, city commercial banks and agricultural commercial banks; and 3) category expansion and upgrading of old products brought about by fund-raising projects. Relying on the brand effect and capital advantage after listing, we believe that the company's growth will be slightly faster than the industry average growth rate (Bank of China Ltd. industry IT solution market scale annualized compound growth rate of about 21%). On the other hand, the company is expected to make full use of the leverage of the capital market to extend its business to cloud services or big data through epitaxial mergers and acquisitions.
Regardless of the catalysis of mergers and acquisitions on the company's performance for the time being, we expect its 14-and 15-year EPS to be 0.83 / 1.01 yuan respectively, corresponding to 41 times of PE / 33 times, and the compound growth rate of net profit is about 21%. Cover for the first time, giving a "hold" rating.
4. Risk tips:
Labor costs continue to rise, customer orders of downstream banks decline, and systemic risks of gem