Incident Summary: Jiuyuan Yinhai released its semi-annual report for 2023 on August 28. In the first half of 2023, the company achieved operating income of 519 million yuan, up 22.7% year on year; net profit of 85 million yuan, up 5.10% year on year; deducting non-net profit of 76 million yuan, up 5.04% year on year; of these, in the second quarter of 2023, the company's revenue revenue for a single quarter was 331 million yuan, up 20.92% year on year; net profit for a single quarter was 68 million yuan, up 4.83% year on year; non-net profit of 62 million yuan was deducted, up 6.58% year on year.

Focus on the three strategic directions of health insurance, digital government, and smart cities. During the reporting period, the company fully supported the operation and maintenance of health insurance information platforms in 23 provinces across the country to ensure the stable and efficient operation of the platforms. In more than 100 cities across the country, there are more than 200,000 health insurance institutions that continue to deeply cultivate the health insurance market and innovate health insurance services. Up to now, the company's healthcare industry market has covered 20 provinces and more than 2,800 hospitals across the country. The social welfare market covers a total of 21 provinces across the country, and has constructed 12 livelihood informatization projects, including the Ministry of Human Resources and Social Affairs's employment management information system and unified national software. During the reporting period, through the development of a series of data element products such as credit files, economic images, corporate credit scores, easy loans, and industrial chain risk assessments, etc., the company unleashed the value of data elements through application scenarios, laying a solid foundation for the company to become an excellent supplier in the field of data element segmentation.

Expense rates are well controlled, and R&D is expected to expand further. According to the semi-annual report, the company's sales expenses and management expenses for the first half of the year were 66 million yuan and 57 million yuan respectively, up 0.85% and 1.10% year-on-year, accounting for 12.74% and 10.97% of revenue, respectively. Regarding the above changes, the company believes that it is an increase in operating income, especially an increase in revenue from software development and operation and maintenance services, which has led to an increase in labor costs, travel expenses, office expenses, etc. associated with this. R&D investment during the reporting period was 122 million, an increase of 9.48% over the same period last year. The company has achieved breakthroughs in basic technology research, and continuous iterative innovation in technology products and support systems has strongly supported product development and implementation in the industry.

Having been deeply involved in the industry for many years, the leading advantage is obvious. The company's market covers 29 provinces, 228 cities and 160,000 medical and pharmaceutical institutions, providing services to 700 million members of the public. The company is a provincial enterprise technology center and has been awarded the “Top Ten Influential Enterprises in the Chengdu Software Industry” for many years in a row. The company has been deeply involved in the field of smart livelihood for more than 20 years, and its market share in informatization fields such as healthcare, medical security, human resources and social security, housing provident funds, and civil affairs is in a leading position in the industry. The company's healthcare industry has complete solutions for high-quality hospital development, and has leading advantages in the fields of smart hospitals, medical community, hospital governance, and medical quality and efficiency management.

Investment suggestions: The company's main business is developing well. It has been deeply involved in the three major livelihood informatization fields of “medical insurance, digital government, and smart cities” for more than 20 years, and is an important partner of the National Health Insurance Administration in informatization construction. The company actively explores various application scenarios of innovative health insurance data elements to help further advance the reform of the national health insurance system. The company's revenue for 2023-2025 is estimated to be 1,502 billion yuan, 1,832 billion yuan, and 2,215 billion yuan respectively; net profit to the parent is 235 million yuan, 292 million yuan, and 341 million yuan respectively, corresponding to PE 56, 45, and 39 times higher, maintaining the “recommended” rating.

Risk warning: Market competition intensifies; data element business expansion falls short of expectations.