Revenue growth in the third quarter is under short-term pressure, and business growth in the fourth quarter is expected to resume the release of the company's third-quarter report in 2023. In the first three quarters, the company achieved operating income of 1.207 billion yuan, an increase of 16.14% over the same period last year, a net profit of-536 million yuan, and a year-on-year loss of 17.20%. Of this total, 23Q3's operating income was 512 million yuan, an increase of 1.35% over the same period last year, and its net profit was-127 million yuan, with a year-on-year loss of 48.56%. The operating cash flow in the first three quarters of 2023 is-677 million yuan, compared with-547 million yuan in the same period of 22 years. Taking into account the impact of the macro environment, adjust the profit forecast, the 2023-2025 revenue is expected to be 24.543077max 3.853 billion yuan (the previous value is 26773564max), reference comparable company Wind consensus expected an average of 3.7times 23PS, taking into account the continuous improvement of the company's brand power, give the company 5 times 23PS, the target price of 155.38 yuan (the previous value of 271.32 yuan), to maintain the buy rating.

The gross profit margin declined slightly in the first three quarters, and the overall three-rate rate decreased slightly. In the first three quarters, the company's gross profit margin was 56.03%, down 1.37pct from the same period last year. The sales / management / R & D rates were 56.81%, 12.35% and 43.54%, respectively, with year-on-year changes in 1.05/-1.97/-1.12pct.

2023Q3's gross profit margin was 58.91%, down 3.01pct from the same period last year, and the sales / management / R & D rates were 46.57%, 9.39%, 37.03%, respectively, year-on-year change-0.01/-1.94/5.96pct. In the first three quarters of 2023, the company's income from selling goods and providing labor services was 1.208 billion yuan, an increase of 18.56% over the same period last year. The overall per capita income of the company has increased rapidly, and the human efficiency has improved significantly, among which the gross profit margin of the security services business has exceeded 4pct.

The application of AI has achieved results, and adapting to the AI product "Hengnao Safety Vertical region Model" newly developed by domestic Computational Power Development Market Space Company plays an important role in the security of Hangzhou Asian Games. The product integrates powerful data integration and analysis functions, collects information from a variety of data sources and tools, and works with situational awareness, threat intelligence platform, vulnerability management, etc., resulting in more than 70% improvement in security operation efficiency. At the same time, the company also well adapts the security model with domestic computing power, its Hengnaoda model supports the full stack AI software and hardware platform, and the Hengnaoda model based on domestic computing power won the gold medal of 2023 Pengteng AI Innovation Competition, demonstrating the company's technological leadership in AI and domestic adaptation.

According to the "2023 China Network Security Technology maturity Curve" issued by Gartner, the company has become a benchmark supplier in data security, CPS security, cloud security resource library, software composition analysis, data analysis, attack and defense confrontation. According to the 2022-2023 China Cloud Security Market Research Annual report released by Sadie Consultants, the company ranks first in the market share of China's security cloud services in 2022. Orders for related businesses such as an Hengyun-Tianchi Cloud, data Security, Xinchuang Security and MSS managed operation services maintained rapid growth in the first three quarters. At the same time, the company developed smoothly in the government and operator market, and signed cooperation agreements with China Mobile Limited, Sichuan Provincial Public Security Bureau, Taiyuan Municipal Government and so on.

Risk hint: the data security business is not as advanced as expected, and the competition in the industry is intensified.