Event: Bosoft released its 2023 Annual Report and 2024 Quarterly Report on the evening of April 24. 1) In 2023, the company achieved revenue of 2,044 billion yuan, up 7% year on year; realized net profit of 327 million yuan, up 28% year on year; realized deducted non-net profit of 301 million yuan, up 31% year on year; 2) 2024Q1, the company achieved revenue of 260 million yuan, up 16% year on year; realized net profit to mother of -56 million yuan, compared with -58 million yuan in the same period last year.
Commercialization capabilities continue to improve, and profitability has been greatly enhanced. From an operating perspective, the company's overall gross margin reached 66.66% in 2023, an increase of 5.03pct over the previous year. Thanks to the company's continuous expansion of commercialization and SaaS-based business model transformation, the company's gross margin level increased significantly over the same period last year. On the cost side, the company's sales/management/ R&D expenses in 2023 were 326/2.95/369 million yuan respectively, with year-on-year growth rates of +16%/+7%, respectively. Against the backdrop of a relative slowdown in revenue growth, the company maintained a good level of cost control, combined with the company's significant increase in gross profit margin, which in turn drove the company to achieve +28%/+31% growth respectively. From a cash flow perspective, in 2023, the company achieved sales revenue of 2100 billion yuan, a year-on-year increase of 17.57%, and achieved a net operating cash flow of 329 million yuan, an increase of 6.73% over the previous year. The company continued to maintain a healthy cash flow growth trend. Judging from the 24Q1 situation, the company's revenue growth rate reached 16% in the first quarter, and the growth rate accelerated. However, considering that the first quarter was a low revenue confirmation season for computer companies, the revenue share was relatively low, so the profit side is still in a state of loss.
Seize the wave of digital government construction and introduce a new digital ticket business. 1) In terms of traditional non-tax and financial electronic bills, the company fully carried out the adaptation and upgrading of security+ Xinchuang projects. In 2023, the company completed the implementation of the Xinchuang project in 14 regions. At the same time, the company actively promoted the SaaS-based transformation of the non-tax bill business and realized the upgrade of the business model; 2) In terms of digital billing, the company actively grasped the core theme of “digital tax management”. Through its own product “Enjoy Collaborative Platform”, it promotes integrated solutions and services such as digital certificate issuance, etc. on the unit side and enterprise side markets. 2023 The company has launched and promoted in more than 20 regions this year, achieving operating revenue of more than 10 million.
The 2024 Equity Incentive Plan was announced, once again demonstrating management confidence. The company simultaneously released a draft equity incentive plan for 2024. The total amount of restricted shares to be granted to incentive recipients under this incentive plan is 16.00 million shares, accounting for 2.13% of the company's total share capital at the time of announcement. The award price for this incentive meter is 11.21 yuan/share. The total number of incentive recipients is 120 people, including 6 company executives including the general manager. The performance assessment conditions are based on the company's average net profit for 2021-2023, and the 2024-2026 growth rate will not be less than 53.74%, 92.18%, and 130.62%.
Investment advice: The company's net profit for 24-26 is estimated to be 4.06, 5.06 million yuan, and 612 million yuan, respectively. The year-on-year growth rate is 24%/25%/21%, respectively. The current market value corresponds to 24/25/26 PE, which is 16 times that of 24/19/26.
Considering the company's leading position in the financial IT field, the company's main business is expected to fully benefit from the subsequent wave of digital government construction and maintain a “recommended” rating.
Risk warning: Market competition intensifies; risks of developing new businesses and new fields; technology development falls short of expectations.