Incidents:
The company released the “2022 Annual Report” after the market closes on March 16, 2023, and the “First Quarter Report 2023” after the market closes on April 28.
Comment:
Multiple factors put pressure on the company's 2022 performance. The company achieved high performance growth in the first quarter of 2023. In 2022, the company achieved operating income of 436 million yuan, down 37.20% from the previous year, and achieved net profit of -122 million yuan to the mother. Affected by external environmental factors such as changes in the industry, the signing and execution of some of the company's orders was delayed, and the execution costs of some projects increased. Furthermore, the company recovered share payment costs related to the “2019 Restricted Stock Incentive Plan” last year. The above two factors led to a decline in the company's revenue and profit. By product, broadband network products achieved revenue of 169 million yuan, a year-on-year decrease of 35.01%; mobile network products achieved revenue of 903 million yuan, a year-on-year decrease of 49.85%; network content security products achieved revenue of 49 million yuan, a decrease of 10.93% over the previous year; big data operating products achieved revenue of 0.08 billion yuan, a decrease of 79.64% over the previous year; and network and data security products achieved revenue of 10 million yuan, an increase of 159.67% over the previous year. In the first quarter of 2023, the company achieved revenue of 215 million yuan, an increase of 143.25% over the previous year; it achieved net profit of 59 million yuan to the mother, an increase of 207.92% over the previous year.
Mobile data traffic continues to grow rapidly, and the network content security market is developing rapidly. In 2022, the construction and application of new infrastructure such as 5G and gigabit optical networks in China accelerated. The total number of mobile base stations increased by 870,000 over the previous year, mobile Internet access traffic increased 18.1% year on year, and average monthly mobile Internet household traffic increased 13.8% year on year. In the process of developing and utilizing data, all walks of life require specialized data security products and services such as data asset management, data security monitoring, secure storage, risk assessment, and security audits as support and guarantee. The data security industry faces greater demand and higher requirements, and has good market prospects. The digital economy and the development of the cybersecurity industry are also driving the rapid development of the network content security market. The scale of the industry continues to grow, and the market has huge potential for development.
Continue to increase investment in R&D and actively expand product categories
In 2022, the company continued to increase R&D investment, accounting for 56.69% of revenue. The company adopted an active expansion strategy, expanded from the field of data collection to the field of data application, and achieved a breakthrough in the scale of the industry. In the domestic market in the field of data collection, protocol recognition capabilities have been enhanced, customer needs are explored in depth, and cybersecurity situation awareness solutions are iteratively upgraded and optimized. Application scenarios have been expanded to various scenarios such as traffic analysis, security audits, asset fingerprinting, vulnerability scanning, security management, and Internet anti-fraud, expanding from a single industry market to multiple industry markets. Overseas markets in the field of data collection provide an open and unified secondary development platform for other enterprises through strong alliances among enterprises. In the field of data applications and security services, big data operation products, network content security products, and network and data security products have expanded product types and segment coverage, further expanding the breadth and depth of the market.
Profit forecasting and investment advice
The company is a leading enterprise in the domestic network visualization infrastructure market, and there is broad room for future growth. It is predicted that the company's revenue for 2023-2025 will be 867, 11.44, 1,472 million yuan, 1,472 million yuan, net profit of 1.55, 238 million yuan, EPS of 0.91, 1.39, 1.98 yuan/share, and the corresponding PE is 46.62, 30.50, 21.43 times. Maintain a “buy” rating considering the company's future growth space.
Risk warning
The risk of increased competition in the market; the risk of management due to growth in scale; the risk of loss of core personnel; risk of intellectual property infringement.