Brief performance review
On February 29, 2024, the company released the 2023 annual performance report.
Revenue side: Revenue surpassed $100 million for the first time. The company expects to achieve revenue of 8.2 billion yuan for the full year of 2023, yoy +37.2%, which is about 3 times the growth rate of the Chinese software industry (13.4% year-on-year growth rate in China's software industry in 23). 2023Q4 is expected to achieve revenue of 360 million yuan, yoy +42.9%.
Profit side: Profit clearly has an upward inflection point. Net profit to mother - The company expects to achieve net profit of 62 million yuan for the full year of 2023, yoy +887.9%. 2023Q4 is expected to achieve net profit of 58 million yuan, yoy +129.4%. Net profit deducted from mother - The company expects to achieve net profit deducted from mother - 78 million yuan, yoy -15.8% for the full year of 2023.
2023Q4 realized net profit after deduction of non-return to mother - $0.09 billion, which turned profit into loss year over year. The company received approximately 75 million government grants in 23 years.
Business side: Seize overseas opportunities, upgrade sales networks, and accelerate the pace of mergers and acquisitions.
1) Seize overseas opportunities: Through strategies such as establishing new branches, recruiting localized talents, and optimizing the global channel network system, the overseas market grew significantly (1-3q23 overseas revenue YoY +71.3%). 2) Sales network upgrade: The company implemented the business strategy of sinking small and medium-sized enterprises and focusing on major customers. While laying out key provinces and cities, it has made significant progress with leading key customers in the industry. 3) Accelerate the pace of mergers and acquisitions: In 23, the company acquired Bochao to enhance its business development capabilities in power grids, digital cities, rail transit and other industries; the acquisition of CHAM, an established British leading CFD company, complements the CFD field puzzle for CAE products, improves the R&D and design software category matrix, and enhances global service capabilities. We believe that 23 was an important year for the steady development and orderly improvement of the company's business, laying the foundation for rapid growth thereafter.
The bottom position in valuation history. We believe that the company has an autonomous and controllable 3D geometric modeling core and is in a leading position in the industry. Relevant benchmark customers are progressing smoothly and maintaining the leading position of CAD in the domestic market. Currently, the company's position is below 12XPS and is at the bottom of the historical valuation.
Profit Forecasts, Valuations, and Ratings
We adjusted the company's revenue forecast for 23-25 to 8.24/1,033/1,291 billion yuan; adjusted net profit to mother for 23-25 to 0.60/1.10/173 million yuan. The current price of the company's stock is 11.9/8.7/6.9 times the PS valuation, maintaining a “buy” rating.
Risk warning
There is a risk that profitability will be squeezed in stages due to increased market competition; the risk that 3D product development falls short of expectations; the risk that customer feedback on the Goku platform falls short of expectations.