Investment events: The company released the three-quarter report for 2023: the company's operating income for the first three quarters of 2023 was 3.686 billion yuan, up 15.50% year on year; net profit was 1,223 billion yuan, loss increased 8.69% year on year; net profit after deduction was -13.

At 06 billion yuan, the loss was 4.30% narrower than the same period last year. In 2023, the operating income of the Q3 company alone was 1.24 billion yuan, down 1.63% year on year; net profit was 343 million yuan, loss increased 59.17% year on year; net profit after deducting non-return net profit - 327 million yuan, loss increased 5.13% year on year.

Revenue continued to grow steadily, and the core product line achieved rapid growth. The company's revenue for the first three quarters of 2023 was 3.686 billion yuan, an increase of 15.50% over the previous year. The company further deepened technology research and development and product refinement, and its core product line grew rapidly. Revenue in the data security category and terminal security category increased by more than 30% in the first three quarters compared to the same period last year. On the market side, judging from the industry structure of revenue, enterprise-level customers are still the main engine of the company's business growth. In the first three quarters of 2023, the company's enterprise-level customers, government customers, and the Public Prosecution and Law Department accounted for 69.58%, 21.17%, and 9.25% of revenue respectively. Among them, enterprise-level customer revenue grew by more than 24% year on year. The total revenue generated by the three major industries of energy, finance, and operators increased by more than 36% over the same period last year, and together accounted for more than 30% of the company's overall revenue. Among them, the revenue of the energy industry and financial industry grew by more than 37% year on year, and the revenue of the operator industry grew by more than 33% year on year. In the 2023 Q3 order, the company signed tens of millions of new major orders in the energy, finance, and operator industries, fully demonstrating the strong demand for cybersecurity products and services from customers in key industries.

The growth rate of gross profit is obvious, and manpower efficiency has improved markedly. The company achieved gross profit of 2,239 billion yuan in the first three quarters of 2023, an increase of 14.69% over the previous year. During the reporting period, the company's three major expense ratios decreased by 12.98 pcts, and operating efficiency continued to improve. Among them, the sales expense ratio, R&D expense ratio, and management expense ratio decreased by 2.93/6.61/3.44pcts respectively. The total amount of the three fees is 3.440 billion yuan, which is beginning to form an obvious scissor gap with revenue. The human efficiency aspect continues to improve. The company's per capita revenue in the first three quarters was close to 380,000 yuan, an increase of nearly 22% over the same period last year.

The major customer market expansion results are remarkable, and the overseas business performance is outstanding. During the reporting period, the company achieved remarkable results in expanding the major customer market, and its advantages became more and more obvious. Judging from the volume distribution of revenue, the revenue of customers above one million in the first three quarters increased by 38.35% compared to the same period last year. The share of operating income increased from 68.22% in the same period last year to 81.72% this year, and the amount of revenue generated by customers above one million customers increased 25.15% over the same period last year. In terms of overseas business, the company has built a network security command system for an overseas country, covering an overall solution for cybersecurity capabilities and services. The contract amount is nearly 300 million yuan. It is also the largest overseas cybersecurity order for China. The project is expected to become a national benchmark project for the “Belt and Road”, which is of great significance in advancing China's cybersecurity industry further into the world.

Investment suggestions: We expect the company's revenue for 2023-2025 to be 80.66/103.41/13.153 billion yuan; net profit of the mother 2.

92/4.64/771 billion yuan. The company's 2023/2024/2025 EPS was 0.43/0.68/1.13 yuan, respectively. Give a “buy” rating.

Risk warning: Policy implementation is slow, the epidemic affects raw material costs and project delivery, the company's business progress falls short of expectations, and market competition intensifies