Zhongxin Secco's revenue in the first three quarters of 2023 was + 75.7% compared with the same period last year, which was in line with market expectations for the company's results in the first three quarters: revenue from the same period last year was + 75.7% to 460 million yuan, net profit returned to its mother became positive to 70 million yuan over the same period last year, and non-net profit was deducted from the same period last year to 50 million yuan. Single third quarter: revenue year-on-year + 32.5% to 150 million yuan, month-on-month + 58.0%; homing net profit from-93.9% to about 290000 yuan, month-on-month ratio-98.1%; deducting non-net profit from year-on-year / month-on-month turns negative to about-1.36 million yuan, which is in line with market expectations.
Trend of development
Revenue growth is eye-catching, products and customers continue to break through. In the first three quarters, the company actively promoted the landing of projects at home and abroad, some projects were successfully accepted, and the revenue growth was eye-catching. Product dimension, in the first three quarters, 1) Broadband network products: revenue from + 89.8% to 250 million yuan, benefiting from supporting visual operation and maintenance products Mano to achieve commercial use; 2) Mobile network products: revenue from + 60.3% to 74.61 million yuan, benefiting from the increase in market share of 2mp, 3ram, 4ram, 5G multi-standard products, and the rapid growth of revenue from electromagnetic space testing products. 3) Network content security products: revenue from + 105.0% to 52.17 million yuan compared with the same period last year, benefiting from the steady recovery of overseas business and breaking through a number of overseas blank markets. In the customer dimension, the government and enterprise business has made continuous breakthroughs in the first three quarters, new product network insight matrix and security accelerator have achieved 10 million-level revenue; OceanMind has opened up new customers in manufacturing / audit / transportation / petrochemical industry to achieve the landing of new orders. In the first three quarters, the company's comprehensive gross profit margin was from + 6.3ppt to 80.3% year-on-year, and from-4.8ppt to 73.4% year-on-year in the third quarter.
We believe that the company continues to optimize the data security management platform, build a sound data security products and service system, with the product promotion in many fields, the leading position is further consolidated.
Expenses continued to narrow, and the cash flow ring ratio improved. In the first three quarters, the total of the company's three fees was basically unchanged at 370 million yuan compared with the same period last year, and the rate of sales / R & D / management expenses decreased to 30.9% 37.2% 11.6% respectively compared with the same period last year. In the third quarter, the three fees totaled-4.9% to 120 million yuan compared with the same period last year, compared with-3.3% last year, and the expenses narrowed quarter by quarter. The net interest rate in the first three quarters is from + 54.6ppt to 16.1%, and that in the third quarter is from-3.9ppt to 0.2%, month-on-month-15.4ppt. In the first three quarters, the non-net interest rate is deducted from + 50.5ppt to 10.2% year on year, and the third quarter is from-3.2ppt to-0.9%, month-on-month-8.5ppt. In the first three quarters, the net operating cash flow narrowed by 70 million yuan to 110 million yuan compared with the same period last year, the net operating cash flow in the third quarter changed from negative to positive 20 million yuan compared with the same period last year, and the new operating assets / liabilities in the third quarter decreased by 30 million yuan compared with the end of the second quarter.
Profit forecast and valuation
Keep the profit forecast in 2023xue 2024 unchanged, and maintain the industry rating that outperforms. Considering the downside of market risk appetite caused by the fluctuation of the macro environment, the target price is lowered by 10% to 44 yuan, corresponding to 33 times of 2023 picks in 24 years, and the current stock price corresponds to 34 times in 2023 picks in 24 years, with 47% upside space.
Risk
Downstream customer demand is not as expected, overseas business expansion is not as expected, and new business expansion is not as expected.