Investment events: The company released its three-quarter report for 2023: the company's revenue for the first three quarters of 2023 was 1,257 million yuan, up 16.14% year on year; net profit to mother - 536 million yuan, loss increased 17.20% year on year; net profit without return to mother - 5.

At 5.6 billion yuan, the loss increased by 16.14% year over year. The company's revenue for Q3 in 2023 was 512 million yuan, a year-on-year increase of 1.

35%; net profit attributable to mother - 127 million yuan, loss increased 48.56% year on year; net profit without return to mother - 134 million yuan, loss increased 42.32% year on year.

The overall business is growing steadily, and the growth rate of emerging security orders is remarkable. The company's revenue for the first three quarters of 2023 was 1,207 billion yuan, up 16.14% year on year. The company's product market share continued to expand, achieving a high revenue growth rate. The company continues to make efforts in the fields of data security, cloud security, Xinchuang security, and MSS hosting and operation services. The market competitiveness continues to improve, and the overall business has maintained steady growth. The growth rate of emerging security orders was high. Among them, the overall contract amount for data security increased by more than 50% year on year, contract amount related to MSS security hosting and operation services increased by 50% year on year, and contract amount related to Xinchuang increased by nearly 170% year on year. Judging from the industry's revenue structure in the first three quarters, the company performed well in industries such as operators and central state-owned enterprises. Among them, operators increased 80% year on year and central state-owned enterprises increased 170% year on year. At the same time, the company's revenue in the Internet communication, education, healthcare, government and other industries all achieved rapid growth.

The gross margin of security services has increased steadily, and per capita efficiency has increased rapidly. The company's gross margin for the first three quarters of 2023 was 56.

03%, down 1.37 pcts year on year, but while the security service business maintained rapid revenue growth, related gross margin increased by more than 4 pcts. The company's overall revenue per capita grew rapidly in the first three quarters, and labor efficiency improved markedly. The per capita sales efficiency increased by more than 20% over the same period last year. The overall growth rate of the company's sales expenses, R&D expenses, and management expenses continued to drop sharply compared to the same period last year. Expense control continued to be optimized. The total growth rate of the three fees in the first three quarters of 2023 fell to 14.08%, down 15.71 pcts from the same period in 2022.

The company was rated as a benchmark supplier in six major fields and launched AXDR focusing on “light operation”. According to the “2023 Hype Cycle for Security in China (Hype Cycle for Security in China, 2023)” report published by Gartner, Anheng Information is listed as a benchmark supplier in six major fields: data security platforms, CPS security, cloud security resource library, software component analysis, data classification, and attack and defense. The company has explored and deeply cultivated security operations and proposed the concept of “lightweight secure operation”. The Anheng AXDR platform is a platform that integrates data sources such as networks and terminals with the XDR concept and aims to achieve a closed loop of threat monitoring, analysis and disposal. AXDR can also be combined with lightweight periodic on-site services, alarm analysis and sorting, diagnosis and treatment of difficult problems, etc., to form a cost-effective “light operation” service model.

Investment advice: Considering that the current macroeconomic recovery falls short of expectations, we adjusted the company's profit forecast. We expect the company's revenue for 2023/2024/2025 to be 24.52, 30.65, and 38.69 billion yuan (26.77, 36.01, 46 before the adjustment.

8.2 billion yuan); the company's net profit to mother was 0.37, 1.11 million yuan, and 250 million yuan (before adjustment: 0.2, 226 million yuan, 527 million yuan; profit increased slightly in 2023 due to business restructuring). The company's 2023/2024/2025 EPS was 0.47/1.41/3.16 yuan respectively (0.26/2.87/6.68 yuan before adjustment), giving it a “buy” rating.

Risk warning: business risk, new market development risk, the company's business progress falls short of expectations, market competition intensifies