Event: the company announced its performance in 2022, KuaiBao, with revenue of 3.438 billion yuan in 2022, an increase of 16.35% over the same period last year, a net profit of 305 million yuan, an increase of 21.21% over the same period last year, and a net profit of 260 million yuan, an adjusted increase of 41.71% over the same period last year, in line with market expectations.

Main points of investment

Steady growth in revenue, significant results in reducing costs and increasing efficiency: under the influence of the epidemic, the company achieved steady revenue growth in 2022, mainly due to 1) major breakthroughs in the public security industry market, successfully opened up Shandong, Tianjin and other provinces and cities regional markets. 2) Mobile office service has been promoted in more than ten provinces and cities across the country, successfully applied to the guarantee of relevant major national meetings, and landed on a number of major projects. 3) release the secure circulation system of secret cube data, and participate in secret reform projects in many industries at the same time. 4) deeply participate in the formulation of industry standards such as vehicle networking and UAV, and achieve the landing of major demonstration projects for data security in the surveying and mapping industry. The company's gross profit margin is stable and actively implements cost reduction to increase efficiency. In 2022, the net profit increased to 8.87% (year-on-year + 0.33pct), and the non-parent net profit increased by 41.71% over the same period last year. The company has a significant competitive advantage as a leader in the password industry.

Create China's first online data compliance service platform, personal insurance business continues to expand: the company for the Internet company Century Huatong to build China's first online data compliance service platform, combined with the layout of field equipment and operation and maintenance, through the service + platform for business output. The order charging standard is charged annually according to the number of registered users of online games, using SaaS service mode, data services need to be closely coupled with the platform business, and customers are highly sticky. The company takes the lead in landing the insurance business, and is expected to continue to expand relevant customers in the future.

With the promotion of the marketization of data elements, the market space of data Security 150 billion is broad: with the introduction of "20 articles of data", the top-level design of data elements is relatively clear, and the market of data elements will enter the stage of rapid construction. In the Twenty articles of data, it is clearly proposed to strengthen the construction of the data security system, improve the data process compliance and regulatory rules system, and build a data security compliance and orderly cross-border circulation mechanism. According to the recent "guidance on promoting the Development of data Security Industry" issued by the Ministry of Industry and Information Technology and other 16 departments, the development goal is set. The scale of data security industry will exceed 150 billion yuan by 2025. At present, it is in the early stage of development and has a broad space. As the password national team, the company is the first to put forward the strategic positioning of the data intelligent security service provider with password as the core, which will fully benefit from the development of the data security market.

Profit forecast and investment rating: considering the progress of the project affected by the epidemic in 2022, we slightly reduced the company's EPS forecast for 2022-2024 from 0.38 to 0.49 to 0.36 to 0.48 to 0.62.

As the national data security team, the company will fully benefit from the landing of personal information protection and other related policies in the Internet and other industries, as well as the promotion of marketization of data elements. Maintain a "buy" rating.

Risk hint: the competition in the industry intensifies and the policy promotion is not as expected.