Performance

On October 26, 2023, the company released the third-quarter report of 2023, showing that Q1-Q3 achieved revenue of 1.378 billion in 23 years, down 13.78% from the same period last year, of which Q3 achieved revenue of 466 million in 23 years, down 22.77% from the same period last year.

In 23, Q1-Q3 achieved a net profit of-89 million, a decrease of 149.64% over the same period last year, and a deduction of non-net profit of-185 million, a decrease of 446.89% over the same period last year. In 23 years, Q3 realized net profit of-4 million, a decrease of 104.74% over the same period last year, and a deduction of non-net profit of-33 million, a decrease of 206.45% over the same period last year.

In 23 years, the net cash flow of Q1-Q3 's operating activities was-357 million yuan, an increase of 4.15% over the same period last year. Among them, the net cash flow of business activities realized by Q3 in 23 years was 9 million yuan, a decrease of 76.44% compared with the same period last year.

In 23, the sales expense rate of Q1-Q3 Company was 37.38%, an increase of 6.81% over the same period last year; the management expense rate was 9.97%, an increase of 1.82% over the same period last year; and the R & D expense rate was 27.41%, an increase of 2.17% over the same period last year. In 23, the sales expense rate of Q3 company was 29.69%, an increase of 0.99% over the same period last year; the management expense rate was 9.92%, an increase of 3.04% over the same period last year; and the R & D expense rate was 26.35%, an increase of 3.07% over the same period last year.

Main points of investment

(1) Smart recruitment business: on June 13, 2023, the National Development and Reform Commission issued the notice on key work of cost reduction in 2023, in which, at the level of the business environment, the notice actively promoted the revision of the tendering and bidding Law and the government procurement system, further standardizing the behavior of participants. The implementation plan includes improving the guarantee system for tendering and bidding transactions, comprehensively promoting the letter of guarantee (insurance), standardizing the collection and refund of margin, and cleaning up the historical deposit. We will improve the technical standards and data norms for electronic transactions in the whole process of tendering and bidding, promote cross-regional compatibility and mutual recognition of CA digital certificates, constantly expand the breadth and depth of electronic tendering and bidding in the whole process, and reduce transaction costs for enterprises. By the end of 2022, the company has cumulatively undertaken public resources trading platform projects covering 29 provinces (autonomous regions and municipalities directly under the Central Government), serving more than 200 prefectures and cities and more than 1000 counties and districts. At the same time, the company has continued to combine AI with its business over the years, and under the birth of various industry models, the company is expected to recruit platform business through AI. Based on the above two, we believe that this policy will effectively improve the order growth rate and operating income of the company's recruitment business sector.

(2) Wisdom government business: in January 2023, the General Office of the State Council issued the guidance on further promoting Interdepartmental Comprehensive Supervision. It is pointed out that there are still some problems in some areas of our country, such as unclear regulatory responsibilities, imperfect coordination mechanism, weak risk prevention ability, repeated inspection, long law enforcement and so on. By the end of 2023, the goal is to establish a mechanism for managing and dynamically updating the list of priority items of inter-departmental comprehensive supervision, to carry out pilot projects of inter-departmental integrated supervision in some areas, and to establish and improve a comprehensive inter-departmental supervision system according to matters. By 2025, we will establish and improve a comprehensive cross-sectoral regulatory system in more areas and on a larger scale, and greatly enhance our ability to identify problems and deal with risks. By the end of 2022, the company's smart government project covers 31 provinces, municipalities and autonomous regions. We believe that this policy will effectively improve the order growth rate of the company's government business sector. at the same time, as AI continues to deepen the company's business, the company may be able to further enhance the stickiness of government business and increase value-added modules to build a digital government.

(3) Digital construction business: in June 2023, the 20th China International Housing Industry and Construction industrialization products and equipment Expo, sponsored by the Science, Technology and industrialization Development Center of the Ministry of Housing and Urban-Rural Development, China Real Estate Association and China Architectural Culture Center, will be held in Beijing. The vice president of Xindian Software and the relevant leaders of the digital residential construction business will give a speech as a forum guest. With the data elements and the "National Integration Government big data system Construction Guide", the demand of the Ministry of Housing and Construction for information integration is gradually increasing. By the end of 2022, the company's cost software has covered 30 provincial administrative regions across the country, and the government investment project evaluation and supervision information platform project has been launched in 6 provinces. Xindian Software is expected to continue to empower the Ministry of Housing by virtue of its experience in the field of digital housing construction.

Profit forecast and valuation

The company belongs to the software and information technology service industry, focusing on the three major areas of wisdom recruitment, intelligent government affairs and digital architecture. We predict that the company's revenue from 2023 to 2025 will be RMB 3.405 billion, with a year-on-year growth rate of 7.18% 12.50% and 17.99% respectively, and the corresponding net profit corresponding to the home will be RMB 6003,846 million, respectively, and the year-on-year growth rate will be 4.79%, 23.69% and 13.96%, respectively, and the corresponding EPS and PE will be 1.82, 2.25and 19.3915.67, respectively. Maintain a "buy" rating.

Risk hint

The demand of government customers is lower than expected, the competition for smart recruitment is intensified, and the policy promotion is not as expected.