Event: Tianrongxin released its third-quarter 2023 report that the company's operating income in the first three quarters of 2023 was 1.648 billion yuan, an increase of 12.63 percent over the same period last year, and its net profit was-248 million yuan, narrowing its loss from the same period last year to 420 million yuan. The company's revenue in the third quarter of 2023 was 644 million yuan, an increase of 10.32 percent over the same period last year, and its net profit was-36 million yuan, narrowing its loss of 214 million yuan compared with the same period last year.
The proportion of high gross margin business has increased, the effect of improving quality and efficiency is remarkable, and the profit quality of the company has been continuously improved.
The level of profit margin continued to improve: the proportion of high gross profit business increased in the third quarter of 2023. On the basis of the growth in the second quarter, the gross profit margin continued to grow 8.51pct in the second quarter, with a year-on-year increase of 20.77pct of 73.03%. In the first three quarters, the company's gross profit margin increased by 62.31% compared with the same period last year. Driven by the increase in gross profit margin, the company's net profit margin increased to-15.08% in the first three quarters of 2023 and 5.63% in the third quarter of 2023.
The company continues to optimize its personnel structure and strengthen cost control measures: the company's expenses in the first three quarters are basically the same as the same period last year, and the expense rate decreased by 11.17pct; the R & D side companies have completed the pre-investment and comprehensive layout in cloud computing, cloud security, Xinchuang security, data security, industrial Internet security, vehicle network security, etc., and the R & D expenditure rate decreased 7pct in the first three quarters of 2023 compared with the same period last year. The marketing side of the company's industry deep ploughing, city sinking and channel expansion strategy has been effectively implemented, and the sales expense rate in the first three quarters of 2023 decreased 0.95pct compared with the same period last year.
Tianrongxin continues to be selected into the list of authorities in the field of network security, and the company's technical capabilities continue to be verified:
On July 3, 2023, the IDC "China IT Security Services Market tracking report in the second half of 2022" was released. Tianrongxin ranked second in the security consulting service market with a 4.5% share, and firmly occupied the absolute top position in the security consulting service market for three consecutive years.
On July 11, 2023, the IDC "IDC MarketScape-China situational Awareness Solutions Market 2023, Vendor Assessment" report was released. Tianrongxin situational Awareness has been selected as the leader for three consecutive times because of its advanced technical architecture, excellent R & D foresight, and extensive customer applicability.
On August 1, 2023, the National Network and Information system Security Product quality Inspection Center issued the first batch of "Security Inspection certificates for Network Security Special products". Tianrongxin exclusively passed three types of firewall inspection, covering 10 gigabytes, gigabytes and 100 megabits.
On August 24, 2023, Frost&Sullivan officially released the Asia-Pacific Web Application Firewall Market report 2022. Tianrongxin Web Application Security Protection system (hereinafter referred to as "Tianrongxin WAF") ranked third in China's hardware WAF market with a market share of 14.6%. So far, Rongxin hardware WAF products have been in the top three queues in the Chinese market for three consecutive years.
Investment suggestion: the company continues to be selected into the list of authority in the field of network security in 2023, the company continues to verify its technical capability, and the company's fee control effect is remarkable, and the future profit margin is expected to rise. It is estimated that the company's return net profit from 2025 to 2025 will be 4.34,5.30 and 649 million yuan, corresponding to 24X, 20X and 16X respectively, maintaining the "recommended" rating.
Risk warning: the industry competition pattern intensifies, and the development of innovative business falls short of expectations.