Event: The company publishes its 2023 annual report. During the reporting period, the company achieved operating income of 1,496 billion yuan, an increase of 25.18% over the same period of the previous year, achieved net profit of 325 million yuan, an increase of 44.31% over the same period of the previous year, and realized net profit deducted from non-mother of 187 million yuan, an increase of 1.57% over the same period of the previous year.
The three product lines worked together and continued to grow steadily for 23 years. The company is a leading digital technology service provider in China. The three product lines of collaborative office, smart channels, cloud and big data are developed collaboratively to provide customers with flexible business models for product sales, customized software development, technical services and effective operation. During the reporting period, the company's three product lines achieved steady growth: 1) collaborative work: revenue of 462 million yuan, up 30.48% year on year; 2) smart channel: revenue of 616 million yuan, up 23% year on year; 3) cloud and big data: revenue of 335 million yuan, up 53.23% year on year.
At the right time for the localization of the Xinchuang industry, the core product RichMail Xinchuang email opened up market space. Benefiting from the strategic drive of Xinchuang's “domestic substitution” and “safe development”, according to data from CCI consultants, China's Xinchuang industry will maintain an average annual growth rate of 30% in the next ten years, breaking the 200 billion mark in 2026. Demand for Xinchuang office software products will continue to rise. Xinchuang will soon enter the era of unified procurement, providing a stable growth space for the company's collaborative office product line and driving a continuous rise in performance. The company will become the main participant in the Xinchuang application software market. The company's core product, RichMail Xinchuang Secure Email, has domestic independent intellectual property rights and has completed full-stack Xinchuang certification. It has outstanding advantages in terms of safety, controllability, stable performance, complete functionality and practicality, and has received high trust and recognition from customers.
Continue to increase R&D to build AI capabilities, focusing on digital humans and AI+ application innovation. During the reporting period, R&D personnel accounted for 69.86%, R&D investment of 300 million yuan, and R&D investment accounted for 20.02% of revenue; an increase of 63.6382 million yuan over the same period last year, an increase of 26.97% over the same period last year. The company continues to invest in research and development in AI capacity building to build the MMS RiChai and launch the AIBox AI AI engine. Through the ability to introduce general-purpose large models, technical components from many fields have been upgraded and integrated. In addition to the capacity building of AI, the company actively invests in digital people and AI+ application innovation, focusing on developing next-generation smart mailboxes, smart cloud disks, virtual digital people and other products to ensure that the company maintains its leading position in industry technology and helps the rapid expansion of innovative businesses.
Deepen operators' state-owned cloud cooperation to help build domestically produced autonomous and controllable digital platforms. The company continuously and steadily provides digital products and overall solutions to telecom industry customers. The company is deeply tied to China Mobile and provides professional consulting services and solutions as the core supplier of mobile cloud certification. In other industries, the company has accumulated over many years in key national industries such as energy, finance, and transportation to achieve high-quality growth in cloud and big data product lines. During the reporting period, the company launched technical support projects for collaborative cloud business expansion in four cities in Guangdong Province, demonstrating the sustainability and replicability of cloud business in Guangdong, and is expected to be promoted and replicated in other provinces across the country.
Investment advice: The company is a leading domestic AI email company. As the era of integrated procurement of Xinchuang is approaching, the three product lines are expected to go hand in hand. We expect the company's net profit to be 392 million yuan, 480 million yuan, and 600 million yuan respectively in 2024-2026, corresponding to PE of 20.1 times, 16.4 times, and 13.1 times, respectively, maintaining the “recommended” rating.
Risk warning: Technology development progress falls short of expected risk; supply chain risk; risk of policy advancement falling short of expectations; risk of consumer demand falling short of expectations; industry competition increasing risk.