系统装备业务毛利率提升，计算产业终端加快布局：分业务来看，2023年H1 公司系统装备业务实现营收12.01 亿元，同比减少32.85%，主要系业务面临政策性调整、市场竞争加剧所致；实现毛利率29.99%，同比上升4.94pct。2023 年H1 公司网络安全与信息化业务实现营收34.27 亿元，同比减少19.15%。公司积极推进计算产业提质增效，中标多家银行项目，文印系列新产品与全国30 余家二级经销商完成了年度业绩签约，为全年行业终端业务发展奠基。Event: August 2023] On 29th, the Great Wall of China released its 2023 interim report. In 2023, H1, the company achieved revenue of 5.012 billion yuan, a year-on-year decrease of 21.70%; net profit of 633 million yuan, a year-on-year decrease of 114.91%; net profit after deducting non-return net profit of 721 million yuan, a year-on-year decrease of 124.33%. The performance is in line with market expectations.
Key points of investment
Xinchuang's sentiment led to pressure on performance. Feiteng's revenue declined year over year: H1 in 2023, the company's revenue decreased year on year mainly because: (1) Xinchuang's stock market replacement was nearing its end, stock market orders fell sharply, and effective demand declined. At the same time, the new market had not yet formed a scale, and demand for new orders was sluggish; (2) the international market faced risks and challenges, and the company's international business orders and revenue declined. In H1 in 2023, Feiteng achieved revenue of 496 million yuan, a year-on-year decrease of 58%; net profit of 260 million yuan, a year-on-year decrease of 203%. The main reason is that Feiteng mainly focused on party, government, credit and innovation, and there were few tenders for party and government innovation in the first half of the year.
The gross margin of the system equipment business has increased, and the deployment of terminals in the computing industry has accelerated: by business, H1's system equipment business achieved revenue of 1.01 billion yuan in 2023, a year-on-year decrease of 32.85%, mainly due to the business facing policy adjustments and increased market competition; achieving a gross profit margin of 29.99%, an increase of 4.94 pct over the previous year. In 2023, H1's cybersecurity and information technology business achieved revenue of 3.427 billion yuan, a year-on-year decrease of 19.15%. The company actively promoted the improvement of quality and efficiency in the computing industry, won bids for a number of bank projects, and completed annual performance contracts with more than 30 second-level dealers across the country for its new printing and printing products, laying the foundation for the development of the industry's terminal business throughout the year.
To build a “peng teng” ecosystem, state-owned enterprise reform can be expected: in July 2023, China Electronics and Huawei decided to merge the Kunpeng ecosystem and the PKS ecosystem to jointly create a “peng teng” that supports Kunpeng and Feiteng processors
Ecology, collaborating with industry partners to develop and create a new pattern of general computing power. We expect the two sides to reach multi-faceted cooperation. Chip collaboration. The two major domestic CPU chips, Feiteng and Kunpeng, are expected to develop ecological construction and in-depth cooperation in technology research and development. The whole machine cooperates. As the leading domestic server and PC manufacturer, Great Wall of China is expected to manufacture the complete machine for the Huawei CPU in the future. Channel cooperation. Huawei and Great Wall have created perfect sales channels in the industry, party, government, and credit respectively. After cooperation, the two sides are expected to share channels and expand market space. At the same time, we expect that the progress of the reform of the state-owned enterprises of the Central Bank of China and the state-owned enterprises will accelerate in the future.
Profit prediction and investment rating: Feiteng is a core manufacturer of domestic ARM CPUs. Cooperation with Huawei is expected to further enhance product power and ecological integrity. At the same time, we expect that the reform of state-owned enterprises in the central government of Xinchuang is expected to accelerate, and that the strength of the Great Wall of China is expected to be further strengthened. At the same time, with the gradual opening of Xinchuang tendering in the second half of the year, China's Great Wall Innovation business is expected to accelerate development. Based on this, we lowered the company's net profit forecast for 2023-2024 to 1.44 (-7.33) /638 (-397) million yuan, gave the company a net profit forecast of 856 million yuan for 2025, and maintained the “buy” rating.
Risk warning: Localization policies are progressing slowly; production capacity is limited; the company's products and shares fall short of expectations.