Investment event: On April 25, the company released its report for the first quarter of 2023. In Q1 of 2023, the company achieved operating income of 1.01 billion yuan, an increase of 20.05% over the previous year; the net profit of its mother was 61 million yuan, an increase of 152.59% over the previous year.
The company's revenue grew strongly, and the business and product structure continued to be optimized. In Q1 2023, the company's revenue grew strongly, achieving operating income of 1.01 billion yuan, an increase of 20.05% over the previous year. The company's business and product structure continued to be optimized. The Q1 IT service sector achieved revenue of 635 million yuan, an increase of 23.16% over the previous year. Among them, the software product and solution product line achieved revenue of 212 million yuan, an increase of 44.24% over the previous year; the business process outsourcing sector achieved revenue of 365 million yuan, an increase of 14.99% over the previous year. On the customer side, the company still maintains its dominant position among large banks. Q1 revenue from large state-owned commercial banks reached 60.80%, an increase of 18.47% over the previous year; the revenue ratio from national joint stock commercial banks reached 17.64%, an increase of 34.88% over the previous year; at the same time, the company's customer lineage was improved, and Q1 added 13 corporate customers, including 2 small to medium banks, 5 non-bank financial institutions, and 6 non-financial institutions. In terms of orders, as of Q1 2023, the IT services sector had signed contracts amounting to 6.811 billion yuan, an increase of 48.91% over the previous year, with sufficient orders. The company's overall performance showed steady growth and maintained an advantage in terms of customers and orders, laying the foundation for the company's long-term healthy development.
Expense control is excellent, and R&D investment continues to increase. The company's gross margin in Q1 2023 was 21.80%, a significant increase compared to Q1 2022 (19.92%). In terms of expenses, the overall situation remained stable. The company's sales expenses in Q1 2023 were 14 million yuan, an increase of 5.96% over the previous year; management expenses were 33 million yuan, an increase of 4.37% over the previous year. At the same time, the company continued to increase investment in R&D and actively explore the application of next-generation information technology in the financial industry. In Q1 of 2023, the company invested 96 million yuan in R&D, an increase of 21.03% over the previous year.
The banking IT industry is on the rise, and companies will actively seize the opportunity. According to statistics, China's large state-owned commercial banks invested nearly 116.6 billion yuan in technology in 2022, and overall investment maintained an upward trend. On this basis, demand for Xinchuang remained unabated, and the status and value of data as a new factor of production continued to be highlighted, and the banking IT industry was on the rise. As a leader in the banking IT industry, the company will actively explore the application of advanced technology in financial business scenarios and seize industry opportunities.
Investment advice: We forecast that the company's revenue for 2023-2025 will be 44.88/54.44/6.537 billion yuan respectively, and net profit of the mother will be 3858/48/574 million yuan respectively. The corresponding PE will be 30/24/19 times respectively, maintaining the “buy” rating.
Risk warning: business development falls short of expectations, policy progress is slow, the epidemic is repeated again on a large scale, etc.