Performance can be expected to be released, and the “buy” rating will be maintained
The company is a core partner of Huawei. The independent innovation business surrounding OpenHarmony and OpenEuler is expected to grow rapidly. The company has mature AI full-stack capabilities, and long-term space can be expected. We maintain the original profit forecast and add the 2025 profit forecast. The company's net profit for 2023-2025 is estimated to be 3.3, 4.1, and 511 million yuan respectively, and EPS is 0.41, 0.51, and 0.64 yuan/share, respectively. Corresponding to the current stock price PE is 61.8, 49.7, and 39.9 times, respectively, maintaining the “buy” rating.
Event: The company released its 2022 annual report and the first quarter of 2023
In 2022, the company achieved revenue of 2,975 million yuan, an increase of 7.82% over the previous year; the net profit returned to the mother was 105 million yuan, a decrease of 40.18% over the previous year. In the first quarter of 2023, the company achieved operating income of 737 million yuan, an increase of 5.12% over the previous year; it achieved net profit of 36 million yuan, an increase of 15.38% over the previous year. 2023Q1 performance showed a recovery trend.
Huawei's core partner is expected to benefit from the wave of innovation in the industry
Open Source Hongmeng: In 2022, the company achieved fruitful results in platform construction, terminal commercial implementation, operating system research and development, ecological contribution, etc., to achieve commercial implementation and promote ecological development. Open Source Euler: The company has implemented several business models in 2022, including a strong combination with hardware server customers to achieve a nationalized software and hardware integration product stack, launch a joint technical cooperation and service system with financial ISV customers, and cooperate with power industry customers to build a domestic operating system distribution for the power industry. As the industry's innovation accelerates, the company is expected to further expand its first-mover advantage, and the performance in 2023 is worth looking forward to.
Launching an integrated artificial intelligence platform to open up space for future growth The company launched an integrated artificial intelligence platform for the smart grid industry, as well as more than 20 artificial intelligence algorithm models applied to scenarios such as power transmission, distribution, substation, materials, safety supervision, and construction sites. In an integrated AI platform, the company built a complete AI product development process with data labeling, model training, and inference execution engines, which greatly enhanced the level of product intelligence. In addition to the smart grid industry, the AI integrated platform will also empower applications in industries such as industry and finance in the future, which is expected to open up space for the company to grow.
Risk warning: policy implementation falls short of expectations; AI implementation falls short of expectations; company R&D and sales fall short of expectations