Overview of events
Run and Software (300339.SZ) released its report for the third quarter of 2023, with operating income of 726 million yuan during the reporting period, down 0.61% from the same period last year; net profit belonging to shareholders of listed companies was 18.4978 million yuan, down 45.89% from the same period last year; net profit belonging to shareholders of listed companies after deducting non-recurring profits and losses was 16.9893 million yuan, down 43.11% from the same period last year; and basic earnings per share was 0.02 yuan.
Analysis and judgment:
The company's short-term performance is under pressure, looking forward to Q4 innovation business demand performance.
1) in the first three quarters of 23, the company achieved an operating income of 2.162 billion yuan,-2.37% over the same period last year, mainly due to the corresponding decline in the traditional technical service business due to reduced customer demand; at the same time, part of the innovation business is still in the project investment stage. Looking forward to Q4, with the continuous promotion of the landing of innovative business industries, the revenue of innovative business will continue to increase. The company realized a net profit of 98.1695 million yuan belonging to shareholders of listed companies,-18.95% year-on-year, and 47.3993 million yuan of net profit after deducting non-recurring profits and losses belonging to shareholders of listed companies,-34.21% compared with the same period last year. This is mainly due to the reduction of customer demand in the traditional technical service business of Smart things, and the corresponding labor costs have increased in the short-term adjustment process of the project. 2) according to the record table of the company's customs activities, innovation business is the key development direction of the company in recent years, and it is also the direction of the company's positive transformation, including open source Hongmeng, open source Euler, AI hub platform, intelligent dual-carbon energy solution and financial automation test platform. In the field of open source Hongmeng and open source Euler, the company has built a complete domestic Xinchuang solution to empower customers in finance, energy, education, health care and other industries to meet their digital upgrade and transformation needs.
Huawei Hongmeng ecological core partner, the company is expected to rely on the industry know-how and ecological advantages continue to benefit.
1) according to the record table of the company's customs activities, since 2020, the company has been fully integrated into the OpenHarmony ecology and has become one of the initiators and co-builders of the Open Atomic Open Source Foundation OpenHarmony open source project. The company is a gold donor of the Open Atomic Open Source Foundation and a Class A donor of the OpenHarmony project. It has long regarded the open source ecological construction represented by OpenHarmony as an important strategy, and has made outstanding contributions in OpenHamrony southward ecological co-construction, northward industry enabling and other aspects: OpenHarmony main warehouse code contribution has always been in the forefront, won the code TOP 10 contribution unit, 100 code contribution unit and other titles 2) in terms of ecological construction, the company has built an OpenHarmony release based on the open source base of HiHopeOS, which provides terminal commercial equipment operating system releases and solutions that deeply integrate industry characteristics and business scenarios for Qianhang Baiye represented by the vertical industry. Through the combination of localization of Xinchuang and the characteristics of industry customers, combined with years of accumulated technical experience and industry know-how, it can enable industry customers to upgrade numerically. Prosper the ecological construction of OpenHarmony. As of September 15, the company has released seven software distributions for finance, power, health care, education, smart cities and other fields.
Seize the development opportunity of the AI era, AI enabling industry ecological intelligence upgrading.
According to the official account of Runhe Software, the company launched the artificial intelligence "1x 6N" development strategy in 2023, that is, an AI hub platform, 6 industries (power, manufacturing, healthcare, financial services / financial testing / development energy efficiency), N solutions, enabling industry partners to improve the efficiency of industry and research. 1) AIRuns, the AI central platform of Runhe Software, is an innovative platform with data as the core, which integrates advanced NLP model, CV model, data AI annotation, advanced data and model version control. At the same time, the concept of innovative workspace is introduced, which makes it possible to iterate multiple task-specific data sets in parallel. At present, Runhe Software has planned the AI product-level strategy according to its own industry characteristics and related customer requirements. Take the lead in business, power, finance, medical and other fields, start the construction of business vision systems, power industry intelligent gateways, financial services, intelligent medical devices and other products. 2) according to the record table of the company's customs activities, in the field of AI, relying on the large model technology, the company is currently making efforts to build financial service products for the financial industry research, which is planned to be launched before the end of this year.
Investment suggestion
Taking into account the company's performance in the first three quarters, we lowered the company's 23-24 revenue forecast of 3.902 million yuan to 35.41 / 4.445 billion yuan, added a 25-year forecast of 5.52 billion yuan, lowered the 23-24 year EPS forecast of 0.38 yuan to 0.54 yuan, and increased the 25-year forecast of 0.88 yuan, corresponding to the closing price of 24.31 yuan per share on October 23, 2023. The PE is 27.62 times for 45.23 PE, which is optimistic about the future growth of the company's innovation business and maintains the company's "buy" rating.
Risk hint
Product research and development is not as expected; Xinchuang's progress is not as expected; market competition is intensified.