General situation of events

Shiji Information will release its third quarter 2023 report on October 30. In the first three quarters of 2023, the company realized operating income of 1.858 billion yuan, down 3.13% from the same period last year; realized net profit of 14 million yuan, up 27.05% from the same period last year; and deducted 5 million yuan of non-return net profit, up 124.92% from the same period last year.

In terms of Q3 alone, the company achieved revenue of 658 million yuan, an increase of 2.44% over the same period last year, a net profit of-8 million yuan, an increase of 66.08% over the same period last year, and a net profit of-12 million yuan, an increase of 50.07% over the same period last year.

Three quarters reported positive growth in net profit, full-year results are worth looking forward to

1) on the revenue side, the company achieved operating income of 1.858 billion yuan in the first three quarters of 2023, down 3.13% from the same period last year; Q3 alone achieved revenue of 658 million yuan, an increase of 2.44% over the same period last year.

2) on the profit side, the company achieved a net profit of 14 million yuan in the first three quarters of 2023, an increase of 27.05% over the same period last year; the net profit of deducting non-return was 5 million yuan, an increase of 124.92% over the same period last year, mainly due to the disposal of Kalibri Labs and LLC shares in the same period last year, with a larger proportion of non-profit, while less non-profit in the current period, resulting in a larger increase in net profit in the current period than in the same period last year. Single Q3 realized net profit of-8 million yuan, an increase of 66.08% over the same period last year, and non-return net profit of-12 million yuan, an increase of 50.07% over the same period last year. Mainly due to the economic recovery, business growth compared with the same period last year, losses fell sharply compared with the same period last year.

3) in terms of gross profit margin, the company's comprehensive gross profit margin in the first three quarters of 2023 was 47.93%, an increase of 4.3 PCT over the same period last year; and the net profit margin was 2.1%, an increase of 0.7pct over the same period last year.

4) in terms of expense rate, in the first three quarters of 2023, the company's sales expense rate was 12.06%, an increase of 1.3pct over the same period last year; the management expense rate was 27.34%, which was basically the same as that of the same period last year; the financial expense rate was-7.03%, an increase of 1.7pct compared with the same period last year; and the R & D expense rate was 13.29%, a decrease of 0.9pct.

5) in terms of cash flow, the net cash flow generated by the company's operating activities in the first three quarters of 2023 was-122 million yuan, an increase of 53.3% over the same period last year, mainly due to the decrease in hardware procurement business compared with the same period last year.

Cloud POS has signed a contract with all global influence TOP5 International Hotels Group, and the launch process of Shiji enterprise platform has been accelerated.

From the progress of signing and launching, 1) in the field of cloud POS, 2023H1 and Hilton Hotels Group signed a new MSA (Master Service Agreement), becoming the only cloud POS product signed by all the global influence TOP5 International Hotel Group, laying a solid foundation for the sustainable development of the business. By the end of the first half of 2023, the company's Infrasys Cloud cloud POS products had a total of 3502 customers. 2) in the field of stone-based enterprise platform, while cooperating with a number of European hotel groups, 2023H1 stone-based enterprise platform continues to expand its launch in the signed benchmark customers Peninsula, Intercontinental and Langham Hotel Group, especially in Continental Hotel Group's hotels in China, which have begun to launch in large quantities and are approaching the goal of deploying 30 hotels per month. The new Dutch independent hotel chain Fletcher Hotels, which has 110 hotels, will fully adopt a pure cloud-based stone-based enterprise platform. By the end of the first half of 2023, Shiji Enterprise platform has launched a total of 135 hotels in Peninsula, Intercontinental, Langting, Ruby, Sircle and other hotel groups, including 93 IHG hotels. Looking to the future, as the epidemic factors fade, the launch process of the stone-based enterprise platform is expected to be further accelerated. With the continuous breakthrough of cloud POS and stone-based enterprise platform, the annual repeatable subscription fee (ARR) of the company's SaaS business was 342 million yuan at the end of June 2023, an increase of 45% over the same period last year.

Investment suggestion

From 2023 to 2025, we expect the company to achieve an income of 3.54 billion yuan, an increase of 17%, 17%, 18%, and a net profit of 0.38%, 160%, 280 million yuan, an increase of 105%, 329%, 75%, respectively, and maintain a "buy" rating.