Incidents:
On the evening of August 27, the company announced its 2023 semi-annual report. During the reporting period, it achieved revenue of 135 million yuan, up 27.47% year on year; net profit of 507.21,800 yuan, up 245.33% year on year; net profit after deducting non-return net profit of 461.47 million yuan, up 15.51% year on year; in the second quarter, it achieved revenue of 69.8823 million yuan, up 30.25% year on year; net profit of 43.9516 million yuan, up 3276.97% year on year; net profit of 2.2536 million yuan, up year on year 129.74%, 2023H1 EPS was 0.58 yuan/share, an increase of 241.18% over the previous year. Non-recurring profit and loss was mainly due to the transfer of 10.83% of the shares of the subsidiary Zhuoyi Culture in June '23 (no longer consolidated), confirmed investment income of 411.72 million yuan, and the main business was under pressure.
The growth rate of the firmware business fell short of expectations
During the reporting period, Nanjing Baiao Software Co., Ltd., a wholly-owned subsidiary mainly in the firmware business, achieved revenue of 67.4679 million yuan, a slight increase of 0.34% over the previous year, and net profit of 16.7977 million yuan, a year-on-year decrease of 20.99%.
Sales expenses fell by 22.50% year on year during the reporting period, mainly due to a decrease in advertising and promotion expenses; the 144.69% increase in management expenses was mainly due to confirmation of share payment expenses of 14.08 million yuan.
Holding Aipuyang is expected to bring in additional business
Aipuyang Shenzhen (Aipuyang for short), a subsidiary with 52% of the company's new holdings, mainly provides integrated development tools (IDE) for enterprise-level database applications. The core product is PowerBuilder, which is a stable stock market. About 14,000 enterprises with stock customers mainly use subscription fees, and most of them are overseas customers. It has a high profit margin. 2022 revenue was 87.18 million yuan, net profit was 40.52 million yuan, and net interest rate was about 46.5%. Currently, there are few domestically produced IDE products. The company's new IDE business will help the company form an “autonomous, secure, and controllable” cloud computing industry chain, improve the “firmware-development software-application software” cloud computing business industry chain, or bring additional business to the company.
Profit Forecasts, Valuations, and Ratings
Since the company officially completed the acquisition of 52% of Aipuyang's shares in July 2023, which may directly increase the company's revenue and net profit. Combined with the company's original business progress, we expect the company's revenue for 2023-25 to be 409/5.23/660 million yuan respectively (original value of 384/5.29/688 million yuan in 23-25), and the corresponding growth rate is 45.00%/28.00%/26.00%, respectively; the net profit of Quimu is 0.96/143/190 million yuan (the original value in 23-25 is 0.63/0.93/149 billion yuan). The corresponding growth rates were 87.26%/49.61%/32.74%, respectively, the 3-year CAGR was about 54.93%, and EPS was 1.10/1.64/2.18 yuan/share, respectively. Since the company is a domestic BIOS leader and has added IDE business, it is recommended to keep an eye on it.
Risk warning: Systemic risk, risk that Xinchuang's progress falls short of expectations, risk that demand from major downstream customers falls short of expectations, and market competition increases risk.