Leading digital vendors of central enterprises maintain a “buy” rating
Considering the impact of the company's increased investment and incentive expenses, we lowered the company's 2024-2025 net profit forecast to 1.78 million yuan and 241 million yuan (previous values were 2.72 million yuan, 374 million yuan), and added the 2026 forecast to 315 million yuan, EPS was 0.88, 1.19, and 1.56 yuan/share. The current stock price corresponds to PE 16.6, 12.3, and 9.4 times. Considering the company's leading position in the treasury sector and forward-looking layout in fields such as Xinchuang ERP, we maintained a “buy” rating.
Revenue grew steadily in 2023, and increased investment affected profit performance (1) The company released its 2023 annual report and achieved annual revenue of 749 million yuan, an increase of 7.80% over the previous year. By industry, the petroleum and petrochemical industry achieved revenue of 385 million yuan, a year-on-year decrease of 10.80%, mainly due to delays in the bidding process and project acceptance period; the construction real estate industry achieved revenue of 128 million yuan, a year-on-year decrease of 5.25%, mainly due to business expansion falling short of expectations for some major customers; in addition, the financial industry and the coal and power industry achieved revenue of 810.941 million yuan and 68.8011 million yuan respectively, up 31.44% and 159.23% year on year. (2) The company's comprehensive gross margin was 38.43%, down 9.23 percentage points from the previous year. As the company developed new business areas and markets, market competition was more intense. The winning bid amount was relatively low and the delivery workload was large, leading to a decrease in project gross profit. The company's four expenses (sales expenses, management expenses, R&D expenses, and financial expenses) totaled 222 million yuan, an increase of 25.45% over the previous year. In addition, some customer repayments fell short of expectations, and accrued credit impairment losses increased significantly. Overall, the company achieved net profit of 62.162 million yuan for the whole year, a year-on-year decrease of 59.93%; net profit deducted from non-return to mother was 4735.17 million yuan, a year-on-year decrease of 67.13%.
2024Q1's revenue and profit performance is impressive. It is expected that in 2024Q1, the company will achieve operating income of 77.527 million yuan, an increase of 43.10% over the previous year; achieve net profit to mother of 3.2708 million yuan, turning a loss into a profit over the previous year. The company's gross sales margin was 42.01%, an increase of 0.95 percentage points over the previous year. The sales expense ratio and management expense ratio were 9.03% and 26.81% respectively, down 2.05 and 4.05 percentage points from the previous year; the R&D expense ratio was 19.17%, a sharp decrease of 33.7 percentage points from the previous year, due to an increase in capitalized investment in some R&D projects. Overall, the company's 2024Q1 performance was outstanding, and the cost control results were remarkable.
Risk warning: risk of macroeconomic situation fluctuations, risk of technological upgrading, risk of internal governance.