Event: The company released the report of the third quarter of 2023. In the first three quarters of 2023, the company realized operating income of CNY 133 million, with a year-on-year growth of 32.58%; The net profit attributable to the parent company was CNY-23 million, with a year-on-year decline of 46.30%; Among them, the revenue realized in the third quarter was CNY 40.1314 million, with a year-on-year growth of 15.78%; The net profit attributable to the parent company was CNY-16.899 million, with a year-on-year decline of 178.22%.
Full orders in hand, continue to increase investment in emerging fields. The Company adhered to the strategy of "two refinements and one depth", and maintained rapid growth in overall performance, with new orders increased by 61% year-on-year in the first three quarters. Among them, the company continued to focus on advantageous industries. In the first three quarters, the revenue of basic industry + public safety industry increased by 36.4% year-on-year, the orders of new basic industry increased by more than 45% year-on-year, and the orders of new public safety industry increased by more than 130% year-on-year. The company continued to strengthen R & D investment, with R & D expenses increasing by 22.65% year-on-year in the first three quarters, continuously increasing investment in satellite Internet technology, network anti-traceability technology, network anti-mapping technology and other emerging technology fields, and released Internet of Things probes for terminal management, new WAF products combined with AI analysis capability, cloud asset vulnerability scanning leasing services for SaaS operation, etc., continuously expanding the moat of the enterprise.
Cyberspace security in the field of national-level specialization special new "little giant" enterprises. The company focuses on cyberspace security field, providing users with network security basic products, business scenario security products, cyberspace map products and network security services, and is a leading network security product manufacturer in China. Adhering to the R & D concept of "two refinements and one depth" for accurate identification, precise defense and in-depth business scenarios, the Company focused on vulnerability and vulnerability detection technology system, application security defense technology system, traceability management technology system and cyberspace map technology system, becoming a national specialized and innovative "small giant" enterprise recognized by the Ministry of Industry and Information Technology.
At the same time, the Company was selected into the IDC MarketScape: China Situation Awareness Solution Market Research, 2023 report in 2023, selected as a member of the Data Security Industry Competition Working Group, and awarded CNVD "2022 Original Vulnerability Discovery Contributor" for three consecutive years.
Investment suggestion: The company is a leading product technology manufacturer in the field of network security space in China. We expect the company to achieve operating income of RMB 3.47/4.81/6.49 million yuan and net profit of RMB 76/114/165 million yuan from 2023 to 2025. The corresponding PE is 52/35/24 times respectively, maintaining the "overweight" rating.
Risk hint: the company's technological innovation is not as expected; the downstream capital investment of Network'an is not as expected; the industry support policy is not as expected.