Key elements of the report:
The company announced its 2023 performance report. It is expected to achieve operating income of 824 million yuan, an increase of 37.18% over the previous year; achieve net profit of 62.255 million yuan, an increase of 887.90% over the previous year; and achieve net profit deducted from non-mother of 78.344 million yuan, compared to -674.13,400 yuan for the same period in 2022.
Investment highlights:
Actively explore domestic and overseas markets, and revenue growth accelerated in Q4 in a single quarter. The overall performance report of the company was in line with expectations. The revenue growth rate for 2023 was 37.18%, slightly higher than the median range of 35.00% to 39.00% revenue growth in the previous performance forecast; net profit to mother was 62.255 million yuan, which was also slightly higher than the median range of net profit of 55 million yuan to 66.0 million yuan according to the performance forecast. Looking at the single quarter, the company's 2023Q4 revenue is expected to be 359 million yuan, up 42.89% year on year. The growth rate is higher than the cumulative revenue growth rate for the first three quarters of 2023 and the year-on-year revenue growth rate for the single quarter of 2023Q3; the net profit from 2023Q4 is expected to be 58 million yuan, a sharp increase of 129.36% year on year, and the growth rate is slightly higher than the cumulative net profit growth rate for the first three quarters of 2023. The accelerated increase in revenue scale and the sharp increase in net profit to mother mainly benefited from the company's deep cultivation of major customers in the industry, sinking small and medium-sized enterprises, and mergers and acquisitions of Beijing Bochao, which had a positive impact on performance.
Optimize the overseas marketing network, and get customer recognition for the best products. The company strengthens its marketing network system in overseas markets by establishing new branches, recruiting localized talents, and optimizing the global channel provider network system, etc., so as to better realize localized marketing, improve marketing efficiency, and provide technical support to local customers more effectively. The company's leading products, ZWCAD and ZW3D, both released 2024 new versions, and their significant improvements in efficiency, stability and functional richness have been recognized by customers. The optimization of the marketing network combined with the improvement of product performance helps further enhance the company's brand influence in overseas markets.
Profit forecast and investment advice: According to the performance report, we slightly adjusted our previous profit forecast. We expect the company's 2023-2025 operating income to be 8.24/10.80/1.405 billion yuan (8.24/10.80/1,404 billion yuan before adjustment), respectively, and net profit to mother of 0.62/1.28/239 million yuan (0.61/128/239 million yuan before adjustment), corresponding to the closing price on February 29, PE is 156.80/76.28/40.86X, respectively, to maintain “increase” ratings.
Risk factors: Market expansion falls short of expectations, product development falls short of expectations, geopolitical risk, increased industry competition, risk of impairment of goodwill.