Incident: The company released its 2023 annual report and 2024 quarterly report. In 2023, the company achieved revenue of 2,044 billion yuan, a year-on-year increase of 6.51%, and realized net profit of 327 million yuan, an increase of 28.40% over the previous year; in the first quarter of 2024, it achieved revenue of 260 million yuan, an increase of 15.73% over the previous year, and achieved net profit of -56 million yuan, an increase of 3.64% year on year. Revenue growth in 2023 was under pressure in the short term, and the first quarter of 2024 started well.
Gross margin increased significantly, or due to revenue quality optimization: the company's gross profit margin in 2023 was 66.66%, an increase of 5.03 percentage points over the same period last year, a significant increase. The main reason may be the increase in the company's share of SaaS and operation and maintenance revenue. First, in the field of digital ticketing, the company continues to innovate the SaaS model scenario and is deeply applied in more than 50 industries such as medical care and K12; second, the company launched a collaborative service platform that mainly uses the SaaS model to help enterprises and institutions intelligently transform their financial and tax data elements and expand the commercial insurance health insurance data element business with high gross margin. Commercial insurance services have reached 27 provinces and cooperated with more than 20 commercial insurance companies; third, in the field of smart finance and finance, the unit side is vigorously implementing finance, assets, and performance with more than 20 commercial insurance companies. Management software.
Repayments showed a good trend: net cash flow from the company's operating activities in 2023 was 329 million yuan, up 6.73% year on year. Accounts receivable in 2023 were combined to prepare bad debts of 27.63 million yuan, a year-on-year decrease of 7.93%. In the context of general pressure on the G side, better repayment was achieved, showing strong resilience; in 2023, monetary capital was 1,392 million yuan, up 38.19% year on year, and there was plenty of cash on the books. The company's operating cash flow increased 8.03% year-on-year in the first quarter of 2024, and the initial cash flow performance was good.
Revenue is under phased pressure, and the electronic certificate reform has given birth to new opportunities: in 2023, the company's revenue growth rate is 6.51%, phased pressure. On the one hand, in the digital ticket sector, the company is in the stage of structural adjustment to step up incubation of innovative businesses. On the other hand, in the digital procurement field, the company may need to step up efforts to explore the application of enterprise procurement, medical procurement, and artificial intelligence in the field of public procurement on the basis of stabilizing the business advantages of government procurement and university procurement. It is worth noting that in order to deepen the pilot work on electronic certificate accounting data standards, the Ministry of Finance and other ministries and departments have successively issued multiple documents since 2023. Relying on years of non-tax and financial electronic bill experience and customer base, as well as the competitive advantage of integrated budget management, the company is expected to accelerate performance contributions or help the company regain a relatively rapid revenue growth rate.
Investment advice: The company's competitive advantage in financial informatization is stable. Relying on opportunities such as digital bills and electronic certificate reforms, revenue is expected to return to rapid growth, and net profit to mother will maintain rapid growth driven by equity incentives. The company is expected to achieve revenue of 23.89/29.89/3,694 billion yuan in 2024-2026 and net profit of 411/5.45/613 million yuan, corresponding PE of 24.50/18.45/16.41 times, respectively, to maintain an “increase in holdings” rating.
Risk warning: The second phase of integrated budget management fell short of expectations, the promotion of the electronic certificate reform pilot slowed down, downstream customer capital was tight, new business development fell short of expectations, etc.