Main points of the report

The company is a leading provider of full-scene network security products and operational solutions established in 2008 and successfully listed on the growth Enterprise Market of Shenzhen Stock Exchange in April 2019.

Focusing on the field of network security and application delivery, the company is a leading manufacturer in the domestic network security industry, and is committed to providing customers with full-scene network security solutions and lifecycle security operation guarantee.

From 2018 to 2021, the company's operating revenue growth remained in the range of 10-20 per cent, and the gross profit margin on sales remained above 70 per cent. In 2022, under the influence of the macro environment, the company achieved operating income of 893 million yuan, down 13.31% from the same period last year, and realized a net profit of 150 million yuan, down 51.57% from the same period last year.

The global cyber security market is developing steadily, and policies drive the rapid growth of the domestic market. According to IDC, the total investment in global cyber security will be US $195.51 billion in 2022 and is expected to increase to US $297.91 billion in 2026. China's network security policy system has been continuously improved, promoting the development of the industry to a new stage. In January 2023, the Ministry of Industry and Information Technology and other 16 departments jointly issued the guidance on promoting the Development of data Security Industry: it is necessary to comprehensively strengthen the system and capability of data security industry, consolidate the foundation of data security governance, adhere to innovation drive, strengthen the status of enterprises as the main body of innovation, optimize the allocation of innovation resources, and stimulate the innovation vitality of all kinds of market players. According to IDC, the total investment in China's cyber security market will be US $12.2 billion in 2021 and will reach US $31.9 billion in 2026.

Adhere to R & D investment and technological innovation to create a leading and reliable product line and solutions from 2018 to 2022, the company's R & D investment will remain at more than 20% of its operating income, and continue to increase R & D investment in data security, cloud security, industrial control security, Xinchuang and other areas. The company has built a product system including security network, security inspection, security analysis, security protection and security services, and continues to provide users with leading and reliable products and solutions. The company's products and services have entered many industries, including government, operators, electric power, energy, finance, transportation, education, health care, etc., and have undertaken network security support for major events such as G20, APEC Summit, World Internet Congress and so on.

Investment advice and profit Forecast

The company is a leading manufacturer in the domestic network security industry. With the rapid development of the industry, the company has a broad space for long-term growth. It is predicted that the operating income of the company from 2023 to 2025 is 11.46,14.29 and 1.748 billion yuan, the net profit is 2.54,3.47 and 452 million yuan, the EPS is 0.39,0.54,0.70 yuan per share, and the corresponding PE is 41.26,30.19,23.20 times. Considering the growth of the company and the valuation level of the industry, the company is given a target of 55 times PE in 2023, corresponding to a target price of 21.45 yuan. Recommend for the first time, give a "buy" rating.

Risk hint

The risk of technological innovation; the risk of technological secrecy and the loss of core technical personnel; the risk of intensified market competition; the management risk caused by the expansion of company scale; the impact of macro environment.