The company's 2020Q1-3 realized income / homing net profit / deducted non-net profit of 9.55 trillion yuan, an increase of 10.34%, 4.00% and 3.45% over the same period last year. The growth rate of deducting non-net profit was lower than that of non-recurrent profit and loss by 32% to 17.6 million, of which income from disposal of non-current assets increased by 9.5 million to 9.67 million.

2020Q3 realized income / return net profit / deducted non-net profit of 3.52 million yuan, an increase of 9.92% over the same period last year. 12.86% /-12.52%, compared with Q2, the growth rate was 1.05%, 32.82%, 15.78%, and revenue and performance recovery accelerated month-on-month.

Analysis and judgment:

(1) Software cloud service revenue: after full cooperation with Huawei, the channel collaborative sales effect appears, and it is estimated that Q3 maintains a growth rate of more than 100%; (2) education service revenue: although the impact of the Q3 epidemic has weakened, it has not fully recovered, but the superimposed Q4 significant recovery is expected to be the same as last year; (3) game revenue: Q3 maintains steady development.

The stability of net profit margin was mainly due to the decline in gross margin but also the decrease in the rate of sales and administrative expenses. The gross profit margin / net profit margin in the first three quarters of 2020 was 46.12% / 6.85%, down 4.25/0.42PCT from the same period last year, and is expected to be mainly due to the increase in software cloud revenue with low gross profit margin. The rate of sales / management / R & D / financial expenses is 13.38% 12.08% Universe 10.12% Universe 0.06%, a decrease of 1.66/3.41/0.69/0.10PCT compared with the same period last year. Other income / income was 0.65%, down 0.52PTC from the same period last year, investment income / income was 0.77%, up 0.86 PCT from the same period last year; credit impairment loss / income was-5.58%, down 2.64PCT from the same period last year.

Investment advice:

To maintain the company's annual EPS of 0.09 shock 0.12 shock RMB 0.16 in 20-21-22, the company's future focus is: (1) the server and PC products developed and manufactured by Xiangjiang Kunpeng have been successfully offline, and the order volume is expected to continue to grow in the future; (2) the gross profit margin of the standard industrial Internet and other companies is 40-60%, and there is still room for improvement in the software cloud business gross profit margin; (3) most of the examination service items are postponed to the second half of the year. Maintain the "overweight" rating.

Risk hint

The business expansion of examination service is not as expected, the retention rate after the epidemic is lower than the expected risk, systemic risk.