Items:
The company released its three-quarter report in 2019, with an operating income of 521 million yuan, an increase of 70.94% over the same period last year, a net profit of 61.1968 million yuan, an increase of 82.32%, and a non-return net profit of 52.6792 million yuan, an increase of 240.98% over the same period last year. Q3 achieved an operating income of 224 million yuan in a single quarter, an increase of 106.31% over the same period last year, a net profit of 34.0871 million yuan, an increase of 268.33%, and a non-return net profit of 30.6741 million yuan, an increase of 812.77% over the same period last year.
Comments:
Q3 revenue doubled, operating efficiency improved to boost the net interest rate. 1) in the first three quarters, the company's revenue increased by 70.94% compared with the same period last year, of which Q3 grew by 106.31% year-on-year, which was further accelerated by Q1 (27.43%) and Q2 (106.31%). This is mainly due to the rapid growth of the company's software products and system integration business revenue driven by localization. 2) the company's gross profit margin was 66.83%, down 12.97% from the same period last year, mainly due to the increase in the share of system integration business revenue. At the same time, the company's operating efficiency improved, and the rate of sales expenses, management expenses and R & D expenses decreased by 5.97%, 4.36% and 6.74% compared with the same period last year, driving the company's net profit rate of sales to 11.62% from 10.88% in the same period last year. 3) in addition, the company's accounts received in advance increased by 90.01% compared with the same period last year, proving that the company's business has stepped into the track of high growth.
It is proposed to change the use of 234 million yuan to raise funds and increase the construction of domestic safety management platform. The company plans to use the 234 million yuan of unused funds raised in the Beixinyuan (Nanjing) R & D and operation base project to build a "security management platform based on trusted terminals" for trusted terminals of different localization platforms. Research and development of trusted terminal security management system, trusted server security reinforcement and audit system, network security management system based on big data, security situation awareness system based on big data, application performance analysis system based on big data, security operation and maintenance management system based on big data, etc. Six products are designed to create an integrated terminal behavior and data security management system and platform for autonomous and controllable computers. Consolidate the company's leading position in the field of terminal security management / data security management in China.
Secure communication aggregation platform information source Doudou has a broad space, and the promotion and application is accelerated. At present, Xinyuan Doudou products have completed the comprehensive adaptation of the localization platform and its technology from server to client, from operating system to database, from middleware to encryption algorithm. Xinyuan Doudou has been deployed and applied in the Ministry of Public Security, Internet Information Office, Aerospace Science and Industry Group, Bank of China Ltd., people's Bank of China Clearing Center and many other government, military, financial and energy industry units, and has been widely praised by industry users.
Investment advice: the company's host audit, identification and other products have been entered the adaptation list, is expected to highly benefit from the wave of localization. We predict that the company's net profit from 2019 to 2021 will be 159 million yuan, 273 million yuan and 394 million yuan, corresponding to 62 times, 36 times and 25 times of PE respectively. With reference to comparable company valuation and company historical valuation, we will give the company 50 times PE in 2020, corresponding to the target price of 9.41 yuan, covering for the first time. Considering that the company's Xinyuan Doudou and big data platform business is still in the development period, we will temporarily give it a "recommended" rating.
Risk hint: the new business development is not as expected; the policy landing is not as expected.