Peace viewpoint:
The company's business deployment tends to be improved, and the parallel pattern of the three main businesses has been formed. Beixinyuan is an important information security product solution provider in China. After 20 years of continuous expansion, the company has completed the main business jigsaw puzzle of "Information Security, Internet and big data", and has gradually transformed from a traditional network security leader to an intelligent security solution provider. In 2018, the demand for software products such as terminal security and Xinyuan Doudou gradually recovered, the overall income growth rebounded, the adverse situation of the decline in gross profit margin was reversed, and the growth of non-performance was relatively stable. In 2018, the company's return-to-home net profit increased by 2.9%, while the non-return net profit increased by 15.15%. Compared with competitors, the company's customers are relatively high-quality, mainly for the government and institutions, key industries, etc., the demonstration effect is good, horizontal and vertical expansion space is large.
The security competitiveness of terminals and industrial control has been consolidated, and instant messaging products have successfully broken through. The company has strong competitiveness in terminal security management, and a number of products have been shortlisted in the procurement catalogue of localized information products made by the central authorities. The company's terminal security products are being adapted to the domestic platform. In 2018, the company has five products listed in the "domestic platform adaptation hardware and software product catalogue". In addition to the traditional information security, in view of the weak domestic industrial control network security protection, the company has launched a series of "source industrial control" security products. In addition, the company's encrypted communications and mobile office platform, Xinyuan Doudou, has achieved misplaced development by focusing on the government and industry markets. Due to its advantages in compatibility with domestic equipment, encrypted communications, private cloud architecture, and data security protection, Xinyuan Doudou users have covered the government, finance, energy, public security, military, military and other industries, among which full coverage has been achieved in the party, government and military fields.
Anke has a broad market space, the company's terminal security and information source Doudou will fully benefit. On the one hand, the domestic network security situation is grim, compliance and domestic demand are the main driving force for growth. In recent years, the government is strengthening the supervision of network infrastructure protection and data security, the compliance management of the industry has been significantly strengthened, and enterprises are paying more attention to new security risks. especially under the background of frequent network security incidents, the network security market continues to expand. According to Sadie consultants, China's network information security market will reach 92.68 billion yuan by 2021, with an annual growth rate of more than 20% and showing an upward trend. On the other hand, with the steady progress of autonomous and controllable process, Xinyuan Doudou will fill the gap of domestic instant messaging software.
Investment suggestion: as a leading terminal security enterprise in China, Beixinyuan has typical software and product characteristics, a high degree of product standardization, and is widely used in key industries such as government, energy, military industry, finance and so on. Customer relationship is stable. Since 2018, Xinyuan Doudou has made further efforts in the party, government and military market, and has been applied in some central state organs and key enterprises, and there is an opportunity to improve the depth and breadth of promotion in the future. At the same time, we believe that the growth of the company's software services revenue will also accelerate. It is estimated that the company's EPS from 2019 to 2021 will be 0.10,0.14,0.17 yuan respectively, corresponding to 55.0,41.1,32.9 times the closing price on July 24, respectively. The company will be given a "recommended" rating for the first time.
Risk Tips:
(1) the risk of the decline of enterprise gross profit margin. Security and controllability is the main starting point for the implementation of China's "network power" strategy, the state may encourage more powerful enterprises to enter this field, industry competition may further intensify, and there is a risk of decline in enterprise gross profit margin.
(2) the growth of Information Source Doudou may not be as good as expected. Xinyuan Doudou is facing a more complex competition pattern, and there are strong competitors in different subdivisions. If enterprises fail to maintain continuous innovation and market development in the future, the promotion of the business may face resistance.
(3) the IT expenditure of government and enterprises is not as strong as expected. Under the downward pressure of the economy, downstream government and enterprise customers may have a decline or delay in IT expenditure due to financial constraints, which has a negative impact on the company's orders and revenue.