Performance performance
[Overall performance]
(1) Revenue of $2,441 billion (-13.56%) for 23 years, net profit attributable to mother of $195 million (-66.00%), net profit not attributable to mother of $79 million (-80.40%).
(2) 23Q4 revenue was $1,063 million (year-on-year decrease of 13.28%), net profit attributable to mother was $284 million (year-on-year decrease of 27.96%), and net profit of non-return to mother was $264 million (year-on-year decrease of 24.48%).
[View by business]
Revenue from smart procurement in '23 was $1,022 million (-16.38%), of which 365 million (-26.63%) from procurement operations, $1,055 million (-14.49%), and digital construction revenue of $358 million (-2.63%) in '23, totaled $2,435 million (-13.76%).
[Gross profit margin, cash flow]
(1) 23-year gross profit margin 61.40% (year-on-year decrease of 4.60pct), 23Q4 gross profit margin 59.29% (year-on-year decrease of 4.59pct);
(2) Net cash flow from operating activities in '23 was 51 million (-45.66%), and net cash flow from operating activities in 23Q4 was 408 million (up 4400.85% year on year).
[Fee rate]
(1) The 23-year sales/management/R&D expense ratio was 28.26%/7.59%/21.02%, the sales expense ratio increased by 3.76 pct year on year, the management cost ratio increased 1.09 pct year on year, and the R&D cost rate increased by 2.41 pct year on year.
(2) 23Q4 sales/management/R&D expense ratio 16.44%/4.52%/12.73%, sales expense ratio decreased by 0.15 pct year on year, management cost ratio increased 0.16 pct year on year, and R&D cost rate increased 2.77 pct year on year.
Performance reviews
Overall performance is under pressure, and new projects are expected to build a good foundation for the company in '24 to achieve revenue of $2,441 billion, a year-on-year decrease of 13.56%. By business, smart procurement revenue was 1,022 million yuan (-16.38%), of which 365 million (-26.63%) of procurement and operation, smart government revenue of 1,055 million yuan (-14.49%), and digital construction revenue of 358 million (-2.63%) in 23 years. The company's overall performance was under pressure, but the company still actively won many projects in '23. Among them, nearly 400 projects related to public resource transactions were added to the company's core procurement sector. China Shipbuilding Materials, China Chemical, Benchmark cases such as Anhui Energy, Capital Steel, and Liaoning Tobacco have taken on more than 60 electronic bidding and procurement platforms for large state-owned enterprises and state-owned enterprises. In 2024, the company is expected to reach an inflection point in performance.
The number of bidding segments for procurement and operation continues to rise, and the “New SaaS Platform New Electronic Trading Platform” created by the company actively building a SaaS-based transformation route added 85 new sections; the number of platform transaction segments increased by 41% over the same period last year. As far as platform tools are concerned, the company has further improved and promoted “Biaoqiao” and “Biaozhentong” products, and created a PC and mobile application portal for bidders. The Biancheng App provides services such as cross-platform and cross-regional digital certificate authentication, digital signatures, electronic signatures, and document decryption. Nearly 500 platforms have been connected, achieving full coverage of CA agencies in the field of public resource transactions. The number of newly registered users increased by 41% over the same period last year.
Recruit industry models to empower the company's business, actively explore the field of data elements, thoroughly research and develop industry models and intelligent agent frameworks, and combine big model technology with the company's business scenarios to verify and implement applications. Based on technologies such as big models, industry knowledge maps, and big data analysis, we develop large-scale models for the recruitment industry, enable high-frequency business scenarios for bidders such as tender document preparation and intelligent automatic pricing, and improve the efficiency of bidders' search and acquisition of bid information through semantic identification of key elements; negative list tests and format specifications are checked on bid documents to ensure that documents meet requirements and specifications, and avoid potential risks in a timely manner.
At the same time, the company actively incubates public data licensing and operation platforms, helps circulate data elements, creates “public data+inclusive finance” products, and constructs personal and corporate financial big data models that meet the needs of financial institutions through public data governance, analysis and exploration, and empowers the innovation and development of bank finance.
Profit forecasting and valuation
We forecast that the company will achieve revenue of 26.79/30.61/3.563 billion yuan in 2024-2026, with year-on-year growth rates of 9.73%/14.26%/16.40% respectively, corresponding net profit to mother of 2.27/2.272/333 million yuan, year-on-year growth rates of 16.45%/20.09%/22.09%, corresponding EPS 0.69/0.83/1.01 yuan, and corresponding PE 31.75/26.44/21.65 times. Although the company's performance was under pressure in '23, it actively built new products and embraced the AI and data factor industries. We believe that with the gradual recovery of the economy, the company's performance is expected to improve in '24, so it maintains a “buy” rating.
Risk warning
Demand from government customers fell short of expectations, competition for smart recruitment intensified, and policy progress fell short of expectations.