Event Overview: On April 25, 2023, Longsoft Technology disclosed the first quarter report of 2023. The company achieved revenue of 553.04 million yuan in Q1 2023, an increase of 24.82% over the previous year; achieved net profit of 129.15 million yuan to the mother, an increase of 40.23% over the previous year; and achieved net profit of 1,888 million yuan after deducting non-return to the mother, an increase of 41.95% over the previous year.
Comment:
The level of fees has been reduced and the repayment situation has improved. The growth rate on the profit side of the company in 1Q23 surpassed the revenue side, mainly due to the improvement in the company's cost control effect. Among them, the company's sales/management/R&D expenses ratio was 8.25%/11.04%/18.10% respectively, down 2.34/3.83/3.69pct from the previous year, and profitability increased dramatically.
Cash received by the company from selling products and providing labor services increased 65.86% year on year in 1Q23, mainly due to a clear year-on-year improvement in the company's project repayment situation. At the same time, net cash outflow from operating activities also narrowed sharply year on year.
The number of new orders placed in the first quarter was good. The company added more than 100 million yuan of new orders in Q1, and continued to exceed orders for major projects. Among them, the company won the bid for a transparent geological support system construction project in the key technology research and demonstration project for intelligent coal mine construction in the Shendong Coal Shendong Mining Area. The contract amount exceeded 50 million yuan. In addition, the company has set more aggressive market expansion targets for product lines such as intelligent mining and coal washing, which is expected to become a new driving force for annual performance growth.
With the launch of the Longsoft Cloud GIS platform, the business model is expected to be optimized. On April 14, 2023, the company issued an announcement disclosing the new product, the Longsoft Cloud GIS Platform. The platform restructured and developed key technologies such as GIS microservice technology and spatio-temporal big data technology in a cloud-native manner, provided a unified product system for multiple terminals such as web, desktop, and mobile, and deployed related software systems on the basis of the company's original intelligent geological security, intelligent mining, intelligent ventilation, etc. SaaS cloud deployment of related software systems based on the company's original intelligent geological security, intelligent mining, intelligent ventilation, etc. The product has enriched the company's cloud-based product line while increasing the customer's choice of product forms. In the future, the company is expected to rely on the cloud GIS platform to guide customers to transition from authorized procurement to subscription systems and optimize the company's business model.
Investment advice: Maintain a buy rating. The company is expected to achieve revenue of 510/699/889 million yuan from 2023 to 2025, up 39.7%/37.3%/25.6% year on year; to achieve net profit of 1.18/164/208 million yuan, an increase of 47.5%/38.8%/26.7% over the previous year.
Risk warning: Industry competition is intensifying, and demand for intelligent mine transformation falls short of expectations.