Operation management has been strengthened, and business transformation and upgrading have achieved obvious results. In 2022, the company achieved revenue of 1,604 million yuan, a year-on-year decrease of 20.60%; it achieved net profit of 1,15393 million yuan, an increase of 106.92% over the previous year, turning a loss into a profit. The digitalization of government enterprises and the steady expansion of data operations and services, with the two types of business accounting for 57.88% of revenue, up 7.82 pct. year-on-year. In terms of gross margin, benefiting from an increase in the share of pure soft projects in the digital business of government enterprises, gross margin was +19.95 pct over the same period last year. , gross margin for data operations and services was +6.43 pct over the same period last year. The company's overall gross margin increased significantly, +7.30 pct. year on year. In terms of cash flow, the company's financial pressure reduction achieved remarkable results. The total net operating cash flow in 2022 was positive 598 million yuan, and accounts receivable and inventory decreased by 423 million yuan compared to the beginning of the year.
The revenue of the data banking business can be expected to increase several times in 2023, and the data factor revenue scale is expected to reach 2 billion yuan in 2025. The company began theoretical research and practical exploration of data transactions in 2017, and by 2022, it relied on super-intelligent storage technology to establish 32 urban data lakes in 20 provinces across the country. In 2021, the company launched the country's first “data bank” based on a government data authorization operation model in Fuzhou, generating 50 million in revenue in the first year after implementation. Moreover, data lake project companies in the four cities of Xuzhou, Zhuzhou, Kaifeng and Fuzhou all obtained local government data governance and operation licenses. The company also signed cooperation agreements with more than 10 provincial big data exchanges to explore regional data element market construction. The company is expected to fall close to 40 data banks in 2025. Assuming each 50 million in revenue, the revenue generated by the data factor in 2025 will be 2 billion yuan, with a gross margin of about 60%.
The actual controller, Hualu Group, plans to integrate into China Telecom, and Yi Hualu is expected to further enhance resource endowments, card advantages, financial support, and synergies. CLP Telecom is an important state-owned enterprise directly managed by the central government. It focuses on the three major positions and responsibilities of “the main military electronics force, the network communication industry national team, and the country's strategic scientific and technological strength”, and lays out the main business in the four major sectors of “electronic equipment, network information systems, industrial infrastructure, and network security.” Currently, CLP has more than 700 enterprises and institutions, including 16 listed companies, and 47 national research institutes; it has more than 200,000 employees, of which 55% are R&D personnel. We believe that CLP has a deep background and resources, and is expected to further enhance the company's resource endowments and financial support in the field of data elements after the restructuring.
Profit forecast: Revenue is expected to be 24.40, 39.08 and 6.170 billion yuan in 2023-2025, with a growth rate of 52.11%, 60.18%, and 57.88%; the net profit returned to the mother in 2023-2025 was 296, 511, and 838 million yuan, with year-on-year growth rates of 72.57% and 64.03% respectively in 2024-2025, giving a “buy” rating.
Risk warning: The progress of the data element business fell short of expectations, and the progress of restructuring fell short of expectations.