Rapid growth in income and significant improvement in cash flow

The company released its three-quarter report in 2023, with operating income of 803 million yuan in the first three quarters, an increase of 21.71 percent over the same period last year, and a net profit of 114 million yuan, down 8.69 percent from the same period last year. Of this total, 23Q3's operating income was 285 million yuan, an increase of 19.95% over the same period last year, and its net profit was 29 million yuan, down 34.03% from the same period last year.

The operating cash flow in the first three quarters of 2023 is-99 million yuan, compared with-212 million yuan in the same period of 22 years. Considering the impact of macro environment and adjusting the profit forecast, it is estimated that the net profit from 2023 to 2025 will be 1.87 billion yuan 2.71 billion yuan (the previous value is 2.63 342 million yuan), and the average Wind of comparable companies will be 32.3 times 24PE. Considering the accelerated release of the future value of health insurance data, the company will be given 45.0 times 24PE with a target price of 29.87 yuan (the previous value 38.74 yuan) to maintain the holding rating.

The gross profit margin declined due to the postponement of provincial health insurance programs. In the first three quarters of 2023, the gross profit margin of the company was 49.58%, down from the same period last year, and the sales / management / R & D rates were 13.07%, 10.50%, 10.19%, respectively, year-on-year change-2.1/-2.44/-0.98pct.

2023Q3's gross profit margin was 47.29%, down 11.39pct from the same period last year, and the sales / management / R & D rates were 13.67%, 9.65%, 11.30%, respectively, year-on-year change-0.9/-2.64/-1.74pct. In the first three quarters of 2023, the company's income from selling goods and providing labor services was 802 million yuan, an increase of 44.23% over the same period last year, and the quality of income was significantly improved. The company's revenue growth is mainly due to the growth of software and operation and maintenance services in industries such as health insurance, people's society, provident fund and so on. The reason for the decline in the company's gross profit margin is that the project implementation, acceptance and sales payback cycle have been extended, resulting in an increase in project implementation costs.

Sufficient on-hand orders and rapid development of medical information business

Since the beginning of this year, the company's orders have increased steadily, and there are plenty of orders on hand. The company's focus on smart health care, smart health insurance, digital government affairs, new smart cities are the national digital economy focus to encourage the development direction, the relevant support policies are frequent. In addition, the company actively distributes hospital-end products and further opens the business market space. In October, the company's hospital information platform products passed the IHE special test, and medical information products passed another international medical information standardization test after obtaining the FHIR test certificate, marking the company's further maturity in medical information interconnection.

With the official listing of the State data Bureau, the company's data elements are expected to accelerate the use of big data technology, cloud computing, blockchain, artificial intelligence and mobile Internet technology to enable health care administrators and service institutions such as health care, medical insurance and hospitals to improve the supply quality of health care services and the governance ability of the health care industry, and build medical services new business type. The company has passed the qualification examination of the exchange and has become the data provider of the big data Exchange in Guiyang and Shenzhen, and the knowledge base of disease diagnosis and treatment path and medical expense analysis system of Jiuyuan Yinhai Hospital as the data capability of the first batch of Guangzhou data Exchange. With the official listing of the National data Bureau, the data element support policy of the medical insurance industry is expected to accelerate the landing, and the company, as an industry leader, is expected to accelerate the realization of business model innovation.

Risk tips: the promotion of medical business is lower than expected; the government's ability to pay is insufficient; market competition is intensified.