Financial IT leader, maintaining a “buy” rating
The company released its 2023 performance forecast. The company's Guosha system and Xinchuang products continued to be launched, and revenue grew rapidly. Driven by the policy, the replacement of Xinchuang and the transformation of Guoxin secrets are expected to continue to advance, and the company is expected to continue to benefit.
We maintain our profit forecast. We expect the company's net profit to be 3.01, 3.97, and 519 million yuan respectively for 2023-2025, corresponding EPS of 2.30, 3.03, and 3.97 yuan, respectively. Corresponding to the current stock price PE is 48.5, 36.8, and 28.1 times, respectively, to maintain a “buy” rating.
Event: The company released its 2023 annual results forecast
The company expects to achieve revenue of 41-4.4 billion yuan in 2023, a year-on-year increase of 27.54%-36.87%. It is expected to achieve net profit of 310-345 million yuan, an increase of 101.86%-124.65% over the previous year, and is expected to achieve net profit after deduction of 269-304 million yuan, an increase of 27.05%-43.58% year on year.
The company's performance exceeded expectations, and 2B business resilience was highlighted
The company's profit increased dramatically, exceeding our expectations. The main reason is that in 2022, the company drastically reduced the fair value of some investment products. In 2023, the company strengthened control of costs and expenses, continued to improve its management capabilities, the growth rate after deducting non-profit was faster than the revenue growth rate, and the profit level increased. The company mainly provides securities market trading system software and securities information services for B-side securities companies, and achieved rapid revenue growth in 2023. Mainly the company's domestic commercial password-related information security systems and some Xinchuang products were deployed and launched at major brokerage firms, indicating that the demand for Guosha transformation and Xinchuang products is relatively rigid, and the company's 2B business resilience is prominent.
The replacement of Xinchuang and the transformation of national secrets continue to advance. The company is expected to continue to benefit. In May 2023, the “Measures for the Administration of Network and Information Security in the Securities and Futures Industry” will be implemented, clearly requiring financial institutions to carry out work related to information technology innovation and commercial cryptographic applications. In June 2023, the China Securities Association announced a three-year upgrade plan to encourage brokerage firms to increase investment in information technology and continuously improve their ability to independently control core systems. Driven by the policy, it is expected that the replacement of Xinchuang and the transformation of national secrets will continue to advance. On the side of Xinchuang, the company proposed full-stack information technology innovation to provide securities companies with solutions based on commercial secrets, Xinchuang, and multi-terminal collaborative digital platforms, which can efficiently complete Xinchuang adaptation work; on the Guansecret side, the company's commercial cryptographic transformation plan with completely independent intellectual property rights is being deployed and launched by major brokerage firms. The company expects the next 1-3 years to be an intensive transformation period, and the company is expected to continue to benefit.
Risk warning: brokers' IT investment falls short of expectations; new product development falls short of expectations; market competition intensifies.