Incidents:
On the evening of August 25, the company released its 2023 semi-annual report. The company achieved revenue of 390 million yuan, an increase of 0.04% over the previous year. Net profit attributable to the parent company reached 45 million yuan, an increase of 15.06% over the previous year, and profit per share was 0.11 yuan. The company deducted non-attributable net profit of 45 million yuan, an increase of 18.29% over the previous year.
One-card and AIOT applications maintain steady growth
In the first half of 2023, the “One Card and AIOT App” achieved sales revenue of 312 million yuan, an increase of 10.51% over the previous year. The company has built a closed business loop of “digital government needs, active bank payments, and comprehensive services for students and students” around the Residents' Service Card. As of 23H1, the company has won bids for instant card issuance equipment projects for various provincial and municipal branches such as China Everbright Bank, Bank of China, China Postal Savings Bank, and Industrial Bank, etc., and has successfully launched a resident-service card platform in more than 50 cities in 10 provinces including Anhui, Guangdong, Hubei, and Jiangsu.
The growth of social operations and big data services is under pressure
In the first half of 2023, social operations and big data services achieved business revenue of 69 million yuan, a year-on-year decrease of 21.37%. In the field of digital public employment services, at the end of the reporting period, the blue-collar employment service products that the company participated in building had joined with more than 1,000 service agencies, covering 25 provinces across the country; in the field of livelihood data product services, the four data products developed by the company had been accepted and successfully listed by many data exchanges; in the field of intelligent knowledge operation services, the company's intelligent knowledge operation services had been launched in nearly 60 cities, with a service resolution rate of over 98%; in the field of social security financial services, the social security financial products jointly created by the company and China UnionPay had been connected to over 1,400 medical institutions across the country, with a cumulative transaction amount of nearly 2 100 million yuan.
Profit Forecasts, Valuations, and Ratings
We expect the company's revenue for 2023-25 to be 1358/19.01/2,472 billion yuan, corresponding growth rate of 50%/40%/30%, return net profit of 1.70/2.17/279 million yuan, corresponding growth rate of 49.21%/27.71%/28.65%, EPS 0.39/0.50/0.65 yuan/share, and 3-year CAGR of 38.72%. Since the company, as a leading company in the social security field, is in the rapid exchange stage of third-generation social security cards, we gave the company 48 times PE in 23 years, the target price was 18.72 yuan, and maintained the “increase in holdings” rating.
Risk warning: Policy promotion falls short of expectations; market competition intensifies; promotion of data products falls short of expectations.