The revenue of Green League Science and Technology in the first three quarters of 2023 was-13.0% compared with the same period last year, which was in line with market expectations: revenue in the first three quarters was-13.0% to 1.21 billion yuan, net loss of homing increased by 105.4% to-520 million yuan, and non-net loss increased by 95.3% to-550 million yuan compared with the same period last year. Single third quarter: revenue from-10.6% to 490 million yuan, month-on-month ratio + 29.2%; homing net loss increased by 181.6% to-110 million yuan, narrowing by 53.2%; deducting non-net loss increased by 107.0% year-on-year to-120 million yuan, narrowed by 52.4%. In line with market expectations.
Trend of development
The product system continues to improve. In the first three quarters, the company provided BYD with a vehicle networking security solution to help it obtain the first R155 network security and R156 software upgrade certification for domestic commercial vehicles, and signed a contract for the first urban safety operation center in the southeast region of Longyan, Fujian Province. And hold 2023TechWorld Green League Science and Technology Wisdom Security Conference, release data safe, "Fengyunwei" security model, "security industry model SecLLM technology white paper" and other new products and research results, further improve the product system and enhance the influence of the industry. Gartner's 2023 China ICT Technology maturity Curve report lists Green Alliance Technology as a representative supplier in China's cloud security and secure access service edge for the fourth time in a row. At the gross margin level, the company's gross profit margin in the first three quarters was from-6.0ppt to 54.7%, and that in the third quarter was from-1.3ppt to 60.5%, with a significant improvement compared with the previous quarter + 20.0ppt.
Expenses have narrowed month-on-month and cash flow has improved. On the expense side, in the first three quarters, the company's three fees totaled + 6.1% to 1.22 billion yuan compared with the same period last year, and the sales / R & D / management expense rate increased to 51.6%, 37.7% and 11.7% respectively compared with the same period last year. The total year-on-year of the three fees in the third quarter is-2.5 to 410 million yuan, compared with-1.6%, and the expenses are all narrowed compared with the same period last year. At the profit level, the year-on-year net interest rate in the first three quarters is-25.1ppt to-43.4%, and that in the third quarter is from-15.1ppt to-22.1%, compared with the previous quarter + 38.9ppt. In the first three quarters, the non-net interest rate is deducted from-25.1ppt to-45.2%, and in the third quarter, from-13.2ppt to-23.3%, month-on-month + 39.9ppt. In the first three quarters, the net operating cash flow increased by 120 million yuan to 240 million yuan compared with the same period last year; in the third quarter, the net operating cash flow changed from negative to positive (+ 110 million yuan) to 20 million yuan, compared with the same period last year (+ 120 million yuan). The year-on-year change of new operating assets / liabilities in the current period is-0.5 billion yuan.
Profit forecast and valuation
Maintain an industry rating that outperforms. Taking into account the uncertainty of the pace of demand recovery, the income of 2023Unix 24 was reduced by 16.6% to 2.63 billion. Considering the pressure on income and the relative rigidity of fees, the net profit of 2023 / 24 was adjusted from 151,210 million to-0.7 billion. We believe that with the gradual arrival of orders, the industry is expected to rise and maintain the target price of 12.2 yuan. based on 3.7x/3.4x 2023 2.7x/2.5x 24 Pmax S, the current stock price corresponds to 2023 Universe 24 Pmax E, which has 35% upside compared to the current stock price.
Risk
The channel expansion is not as expected; the downstream customer demand is not as expected.
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