Event: on February 29, 2020, the company released its annual results, KuaiBao. During the reporting period, the company's total operating income was 714.3798 million yuan, up 24.80 percent over the same period last year; operating profit was 21.7319 million yuan, down 78.00 percent from the same period last year; and the net profit belonging to shareholders of listed companies was 23.0941 million yuan, down 75.46 percent from the same period last year.
Main points:
The information security industry is the leader and the terminal industry has a solid position.
Beixinyuan is one of the leading information security enterprises in China, successfully building a well-known information security brand "Beixinyuan VRV", with more than 1200 information security professionals, and building a marketing and service network in seven regions and nearly 30 provinces and cities, and occupies a leading position in brand awareness, market, products and talents. The company complies with the market trend, initiates and implements brand-new strategic planning, and lays out information security, Internet and big data as the company's three major strategic directions, and strives to gradually build Beixinyuan into a comprehensive solution provider for intelligent security in the era of the Internet of things, and is currently comprehensively expanding from terminal security and data security to big data security, cloud security, mobile security and Internet of things security. In terms of communications business, the company's industry position will remain stable: the company's flagship product Xinyuan Doudou builds a secure communication aggregation platform, providing instant messaging, intelligent office and secure interconnection services based on the Kunpeng ecological environment, achieving efficient communication within and between organizations.
In line with the development trend of the industry, the temporary decline in performance does not change the future prospects.
According to KuaiBao's performance, the company's operating income reached 714 million yuan in 2019, an increase of 24.80% over the same period last year. The company's operating profit and homing net profit decreased by 78% and 75% respectively compared with the same period last year, mainly due to the accelerated growth of the information security market, intensified competition and a reduction in the company's gross profit margin. According to the company's three-quarter report, the company's sales gross profit margin in the first three quarters was 66.83%, down 12.97% from the same period last year. In addition, the company continues to increase R & D investment and continue to open up the market, resulting in R & D and sales expenses growing faster than revenue growth. The company's R & D expenditure is increasing year by year.
In 2018, the company's R & D expenditure totaled 120 million yuan, accounting for 20.96% of the operating income. In 2019, under the influence of the information security innovation industry policy, the company increased the technological research and development and innovation of Xinchuang security products, as well as increased marketing efforts, and the increase in R & D and sales expenses was more than 30%. The continuous R & D investment and the improvement of the marketing service network will help to enhance the company's technical reserve, continuously improve product performance and service quality, improve the company's core competitiveness, and enhance the company's cross-regional management capability. it has laid a good foundation for the sustainable development of the company in the future.
Xinyuan Doudou telecommuting platform helps CPPCC performance platform online government affairs, and the company launches epidemic emergency command and communication system.
One of the company's core products Xinyuan Doudou is a secure communication aggregation platform with "secure connection, intelligent aggregation" as the core concept, private server as the carrier and instant messaging as the basis. Xinyuan Doudou has a variety of functions such as mobile office and public service, and provides users with remote collaborative office functions, such as instant messaging, video conferencing, mobile phone attendance, security cloud disk, and so on. Users can according to their own needs, add mail system, task approval, schedule management and other high-quality standard office applications, which has become one of the choices for enterprises to work during the COVID-19 epidemic. Xinyuan Doudou has provided information interconnection services for the CPPCC performance platform, which was fully put into use in 2018 and co-sponsored by Beixinyuan and China Unicom Xinyuan Doudou provides important functions for the platform, realizing the functions of "contact", "point-to-point communication", "system information push", and "topic discussion". The largest group of the system holds 2500 people. created in the field of instant messaging system community to accommodate the largest number of people, the system has been online for more than a year, and the operation is very stable. In addition, the company has also launched an epidemic emergency command and communication system to help national governments at all levels, medical management units and hospitals to quickly build a safe and stable emergency command system during the epidemic period. it includes six functional modules: incident reporting, event disposal, risk early warning, command and dispatching, information disclosure and zero reporting. During the critical period when novel coronavirus is sweeping the country, the company will open free to Xinyuan Doudou to the public from February 4 to June 30, as well as some platform applications free of charge.
The market leader of domestic terminal security ushered in a great opportunity for development.
As the domestic terminal security market leader, the company has Beixinyuan domestic security series products and Beixinyuan host monitoring and audit system. At present, Beixinyuan has established a strong enterprise matrix with excellent upstream and downstream companies in the industry, such as Kunpeng, Feiteng, Shantong, Godson, etc. The series of security products fully support domestic CPU such as Godson, Feiteng, Zhaoxin, domestic databases such as Kunlun, Dameng, Jincang, a series of localized operating systems such as Kirin Software and Unified Software, as well as home-made complete machines such as Lenovo and Great Wall, following the nationalized and self-controllable national strategy. Work together to create a safe, home-made, self-controllable ecosystem.
According to the Analysis report of China's most valuable New and innovative Enterprises in Cyber Security released by Sadie Consultants in 2019, the market size of China's cyber security market is expected to be 60.81 billion yuan in 2019 and will reach 92.68 billion yuan by 2021. Will maintain a continuous market growth rate of more than 20%. The substantial growth of the domestic network security market provides a great opportunity for the company to develop.
We have reached in-depth cooperation in various fields with Huawei to lay out the industrial ecology of Kunpeng.
Over the past year, the company has reached large-scale and in-depth cooperation with Huawei in many fields. In April 2019, the company was invited to join Huawei Security Business Alliance, and the two sides reached multi-point agreement on cooperation. On June 18, the company signed a "Strategic Cooperation Agreement" with Chengdu Dingqiao Communication, a subsidiary of Huawei, to jointly promote the construction and development of secure mobile application ecology. In July, the company formally reached a cooperation with Huawei, and the two sides will conduct in-depth cooperation in big data and artificial intelligence, Internet communications, mobile office, data security, cloud computing and other areas. In December, the company's host monitoring and audit system and instant messaging source Doudou passed Huawei's technical certification, completed the compatibility test with Huawei Kunpeng Desktop Cloud, and obtained Huawei's technical certificate.
In January 2020, Beixin source antivirus system V3.0, instant messaging source Doudou V4, host monitoring and audit system v1.2 and Huawei Technology Co., Ltd. FusionCube Kunpeng integrated desktop cloud completed the compatibility test. Huawei Intelligent data and Storage granted it the right to use the HUAWEI COMPATIBLE certificate and related certification logo. On February 12, Huawei Consumer BG established the Global Ecological Development Department, which is responsible for promoting the ecological construction of Huawei HMS on a global scale. The establishment of this department will greatly contribute to the improvement of Huawei's HMS ecology and is expected to bring a large number of orders to the company. The extensive cooperation between the company and Huawei has brought great development opportunities for the company, which is beneficial for the company and Huawei to work together to lay out Kunpeng industrial ecology and create multi-level security protection for Kunpeng ecology.
Company profit forecast and investment rating: optimistic about the development of the company in the field of information security innovation and the market expansion of Xinyuan Doudou products, the company's net profit from 2019 to 2021 is expected to be 0.23,1.71 and 226 million yuan respectively, corresponding to 0.02,0.12 and 0.16 yuan EPS respectively. The current stock price corresponds to the PE value of 598,81 and 62 times from 2019 to 2021, respectively. Give a "recommended" rating.
Risk tips: increased competition in the industry, product promotion is not as expected, Xinchuang business promotion is not as expected.