Incidents:
The company released its three-quarter report for 2023. In the first three quarters, it achieved operating income of 133 million yuan, +32.58% year-on-year; net profit of 23 million yuan, -46.3%; net profit after deduction of net profit of 26 million yuan; and gross margin of 71.94%, year-on-year -2.45 pct. On a quarterly basis, the operating income/net profit realized in Q3 of 2023 was 0.4/-017 million yuan, +15.78% and -178.22%, respectively; the gross profit margin was 70.16%. Sales expenses/management expenses/R&D expenses for the first three quarters were $0.72/0.21/042 million respectively, +34.03%/+38.11%/+22.65% over the same period last year.
Comment:
The company's revenue grew steadily, and the amount of new orders increased significantly over the same period last year. Adhering to the “focus on industry” strategy, the company achieved revenue of 133 million yuan in the first three quarters, +32.58% year-on-year, and the revenue of the customs industry and public safety industry +36.4% year-on-year. Looking at the order side, the company's new orders in the first three quarters increased by +61% year on year, new customs industry orders increased by more than 45% year on year, and new public safety industry orders increased by more than 130% year on year.
The company attaches importance to R&D investment and lays out emerging technology fields. The company's R&D expenses in the first three quarters were 42 million yuan, +22.65% over the same period last year, and the R&D expenditure rate was 31.39%. The company continues to invest in emerging technology fields, insists on loopholes as the core, continues to break through and innovate in basic technology, and broadens the corporate moat. In the field of emerging technology, the company has deployed satellite Internet technology, network anti-traceability technology, and network reverse surveying and mapping technology.
The company has released a number of new products with a solid technical foundation. The company released an IoT probe product to help users carry out comprehensive terminal management through matching and analysis with the company's massive fingerprint information; the company released a new WAF product, combining cutting-edge technologies such as AI analysis, which greatly improved the ability to identify, detect and actively prevent unknown threats; the company combined cloud service trends to launch a SaaS operating model to provide cloud asset vulnerability scanning and leasing services.
Profit forecast: The company has a leading edge in the fields of vulnerability and vulnerability detection, application security defense, etc., and has a first-mover advantage in the field of cyberspace maps. We expect the company to achieve net profit of 0.7/1.03/144 million yuan in 2023/2025 in 2023/2025, giving it a “buy” rating.
Risk warning: Industry development, company business progress, profit forecasts and valuations fell short of expectations.