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Recently, the company released a semi-annual report that the operating income in the first half of the year was 135 million yuan, an increase of 27.47% over the same period last year; the net profit returned to the mother was 50.7218 million yuan, an increase of 245.33% over the same period last year; and 4.6147 million yuan was deducted from non-net profit, an increase of 15.51% over the same period last year.
Comments:
Structural optimization performance to achieve high growth, share payment to improve management costs. On the performance side, the company continued to optimize its business layout and product structure in the first half of this year, achieving operating revenue of 135 million, an increase of 27.47% over the same period last year.
Baiao Software, a wholly owned subsidiary of the company, achieved an operating income of 67.4679 million yuan and a net profit of 16.7977 million yuan in the first half of the year. A 52% stake in Ai Puyang Shenzhen China News has not yet been included in the merger. In addition, the company disposed of 10.83% of the shares of Zhuoyi Culture, a subsidiary, in June 2023, and confirmed an investment income of 41.1172 million yuan. On the gross margin side, the company achieved a gross margin of 47.13% in the first half of 2023, down slightly from 48.15% in 2022. On the expense side, the company realized 3.2349 million yuan in sales expenses in the first half of 2023, a decrease of 22.50% over the same period last year, mainly due to the decline in advertising and publicity expenses; the management expenses were 32.7655 million yuan, an increase of 144.69% over the same period last year, mainly due to the confirmation of 14.081 million yuan in share payment fees in the first half of the year; the financial expenses were 588700 yuan, down 33.39% from the same period last year. The R & D expenditure was 23.2091 million yuan, a decrease of 13.68% over the same period last year, mainly due to the reduction of R & D fees and technical service fees in the first half of the year.
Product solution continues to evolve, "one body and two wings" coordinated development. In terms of cloud computing equipment firmware, on the one hand, the company continues to upgrade domestic product programs in the field of computer security and reliability, on the other hand, for the booming domestic ARM server and terminal chip, as well as the ready RISC-V chip, it plans to join more product lines, and join hands with chip companies in the field of standard summary and formulation to promote domestic substitution to achieve faster development. In terms of cloud service technology, the company's cloud service technology research and development has also made progress in many aspects in the first half of the year: ① development cloud platform iteratively completed V2.0 stable version, can build business scenario applications through low code, and now supports PCWeb application construction. And integrate the platform capabilities such as workflow, message push and user rights; ② PaaS platform completes the iteration of V2.0 version, which can support the deployment of container platform on the edge side, and can meet the environmental requirements of privatization and Internet of things product deployment. ③ Chillhouse Digital Building Integration platform iteratively released V1.4.3 stable version, including intelligent integrated management, space asset management, property management, operations management, E-cartoon management and financial management.
The business is leading, the solution is complete, and the company's core competitiveness is stable. In terms of firmware business, the company is not only the only domestic supplier of X86 architecture BIOS and BMC firmware, but also a few mainland manufacturers with the ability to develop BIOS products for CPU architecture such as ARM, MIPS, Alpha and so on. The company occupies a leading position in the field of BIOS firmware product development in China and has the ability to compete with international manufacturers. In terms of cloud services business, after years of accumulation, the company has built a cloud platform architecture with independent intellectual property rights, including perception layer, IaaS layer, DaaS layer, PaaS layer and SaaS layer, which can provide end-to-end cloud services. In addition, based on the company's years of experience in cloud service product development, the company has achieved rapid construction of cloud service solutions in government, enterprise, building, culture and other fields.
Investment advice: Xinchuang is expected to accelerate, and the spatial pattern can be improved, so the performance forecast is raised. We expect the company's operating income to be 3.86,5.47 and 728 million yuan from 2023 to 2025, with corresponding growth rates of 37%, 41.7% and 33%. The corresponding growth rates are 100.8%, 44.5% and 39.8% respectively (the previous value of 2023-2024 homed net profit is 0.76 / 121 million yuan). The EPS forecast from 2023 to 2025 is 1.18,1.70,2.38 yuan respectively. With reference to comparable companies and historical valuations, and considering that the company is the leader in the firmware industry segment, the company is given 70x PE in 2023, corresponding to a target price of about 82.6 yuan, maintaining a "strong push" rating.
Risk Tip: unable to continue to be authorized by Intel Corp; downstream Xinchuang server, PC shipments are not as expected; industry competition intensifies.