Incident: Roput released its report for the third quarter of 2023. In the first three quarters of 2023, the company achieved operating income of 324 million yuan, a year-on-year increase of 212.47%; net profit attributable to shareholders of the parent company -4.7 million yuan, loss decreased by 87.96% year-on-year; net profit attributable to shareholders of the parent company after deducting non-recurring profit and loss was -1.04 million yuan, and losses decreased by 75.75% year-on-year.
Preliminary verification of full-year revenue recovery: Benefiting from confirmation of delayed receipt and release of delayed demand, the company further accelerated the trend of recovering revenue growth in the third quarter. In the third quarter, the company achieved revenue of 206 million yuan, an increase of 369.37% over the same period in 2020, slightly higher than the revenue scale for the same period in 2020. Compared with the high for the same period in 2021, the decline was narrowed to only 8%. The full-year revenue recovery has been initially verified. Judging from the interim report data, the main driving force for restoration comes from the social safety system solution business, and the security product repair situation is weak. Compared with industry leaders, it is mainly affected by the contraction in demand in the security industry. If downstream demand recovers later, the overall scale is expected to grow further.
The gross margin for a single quarter reached a new high for the same period, and the rapid increase in sales expenses suppressed net profit: the company's gross margin improved significantly in the third quarter. The gross profit margin was 47.30%, higher than the same period in 2020-2022, and only lower than the peak gross margin of 49.59% in the first quarter of 2021. Affected by the company's increased expansion efforts in key regions, sales expenses in the first three quarters increased by about 66% year on year. It is expected that the expansion of sales expenses will decline somewhat after achieving phased results, and the company's net profit will be better released at that time.
The National Bureau of Data was officially unveiled, which is expected to benefit from the use of data elements: on October 25, the National Bureau of Data was officially unveiled. The National Bureau of Data is mainly responsible for coordinating and promoting the construction of data infrastructure systems, and coordinating the integration, sharing, development and utilization of data resources, etc. The official listing of the National Bureau of Data is expected to accelerate the formulation of industrial policies related to data elements and catalyze the application of data elements in various fields. The company's business involves various industries such as public safety, smart politics, smart transportation, smart oceans, ecological environments, smart cities, etc., and is expected to benefit from the stimulus of industry policies.
Investment advice: The company's revenue recovery momentum in the first three quarters was strong, and the company's performance growth throughout the year was quite optimistic. The company is expected to achieve operating income of 721, 9.56, and 1,193 billion yuan in 2023-2025, respectively, and net profit of 0.20, 0.95, and 178 million yuan, corresponding to EPS of 0.11, 0.51, and 0.95 yuan, respectively. Maintain a “buy” rating.
Risk warning: Order confirmation revenue time fell short of expectations, downstream demand expansion fell short of expectations, and market competition intensified.