Event: on October 28, 2019, the company released its report for the first three quarters of 2019. According to 2019Q1-Q3, the company realized 521 million yuan in revenue, an increase of 70.94%, a net profit of 61.2 million yuan, an increase of 82.32%, and a deduction of 52.68 million yuan in non-net profit, an increase of 240.98%.
Software products and systems integration business drive high performance growth. 2019Q1-Q3, the company achieved revenue of 521 million yuan, an increase of 70.94%, higher than the growth rate of 51.33% reported in mid-2019; 2019Q3, the company achieved revenue of 224 million yuan, an increase of 106.31%, accelerated compared with the first two quarters (27.43% and 70.18%, respectively), mainly due to software products and system integration business drivers. In terms of net profit, 2019Q1-Q3, the company achieved a net profit of 61.2 million yuan, an increase of 82.32%, a deduction of non-net profit of 52.68 million yuan, an increase of 240.98%, an increase of 2019Q3, a net profit of 34.09 million yuan, an increase of 268.33%, and a deduction of 30.67 million yuan, an increase of 812.77%.
Change the use of raised funds to develop a security management platform based on trusted terminals to enhance the stickiness of the company's existing users and expand new customers. In October 2019, the company proposed to use the 234 million yuan raised for the construction of a "trusted terminal-based security management platform", including the research and development of a trusted terminal security management platform driven by big data (including 6 products, and plans to apply for 20 invention patents) and marketing. The company is in a leading position in the field of terminal security management in China. the implementation of this project will help customers better transition to a trusted localization platform, improve the stickiness of the company's existing customers and expand new customers.
Xinyuan Doudou created a new platform for secure mobile communications, and the company joined hands with Huawei to enter the private cloud security market. Xinyuan Doudou is an aggregation platform based on private server and instant messaging, which extends the company's information security business to mobile terminals. At present, Xinyuan Doudou products have been adapted from CPU, server, operating system, database and mobile terminal equipment, and deployed to many government and enterprise units such as the Ministry of Public Security, Internet Information Office, Aerospace Science and Industry Group, Bank of China Ltd. and so on. In June 2019, the company signed a Strategic Cooperation Agreement with Chengdu Dingqiao Communications, a joint venture company of Nokia and Huawei, and in July 2019, Beixinyuan official Weiwei announced a cooperation with Huawei to stack Huawei's capabilities with Beixinyuan's security communications products to create a leading aggregation platform for office communications applications and jointly enter the private cloud security market.
Profit forecast: it is estimated that from 2019 to 2021, the net profit of return to the mother will be 1.72 million yuan, respectively, and the EPS will be 0.12, 0.19, 0.27 yuan, respectively. The current stock price corresponding to PE will be times that of 64-39-29, and the "Buy" rating will be given for the first time.
Risk tips: intensified competition in the industry; Xinyuan Doudou promotion is not as expected; the risk of policy change.