国产替代推动公司收入稳增，订单及现金流表现亮眼。收入端，2023 全年公司数字金融业务/大数据类解决方案/全面价值管理解决方案收入11.49/6.20/1.49 亿元，同比+3.8%/-2.9%/+4.6%，海外业务2023 年营收1.25 亿元，同比-25.6%，收入承压系2022 年签单下行影响。订单端，2023 年订单增速约17%，根据公开业绩会，公司预期2024 年订单增速在15-20%，银行IT 核心系统国产替代趋势持续。2023 年公司加强回款，全年销售商品提供劳务收到的现金流为18.82 亿元，同比+17.8%。1Q24 合同负债2.59 亿元，较2023 年末2.26 亿元增长14.7%，订单端持续攀升。The 2023 results fell short of our expectations, and the 1Q24 results met our expectations
The company announced its results for the year 23 and 1Q24: annual revenue of $1,918 million, +1.6% year over year; net profit to mother of $0.32 billion, +43.0% year over year; net profit after deducting non-return to mother of $26 million, +188.6% year over year. 4Q23 revenue was 741 million yuan, -10.9% year on year; net profit to mother was 31 million yuan, +85.9% year on year; net profit after deducting non-return to mother was 0.2 billion yuan, +257.3% year over year. Stock payments and goodwill impairment affected profit performance in '23, and the results fell short of our expectations; 1Q24 revenue was $289 million, -2.5% year over year; net profit to mother - $204 million, which was in line with our expectations.
Development trends
Domestic substitution has driven a steady increase in the company's revenue, and the order and cash flow performance is impressive. On the revenue side, the company's digital finance business/big data solutions/comprehensive value management solution revenue for the full year of 2023 was 1,149/6.20/149 million yuan, +3.8%/-2.9%/+4.6% year-on-year, and overseas business revenue of 2023 was 125 million yuan, -25.6% year-on-year. The revenue pressure was due to the downward impact of signing orders in 2022. On the order side, the order growth rate in 2023 is about 17%. According to the public results meeting, the company expects the order growth rate to be 15-20% in 2024, and the trend of domestic replacement of bank IT core systems will continue. In 2023, the company strengthened repayment, and the cash flow received from sales of goods and services for the whole year was 1,882 billion yuan, +17.8% over the same period last year. The 1Q24 contract debt was 259 million yuan, up 14.7% from 226 million yuan at the end of 2023, and the order side continued to rise.
Controlling human efficiency will stabilize gross profit, and share payments and goodwill impairment will affect profit performance in 2023. On the profit side and expense side, the company's gross profit margin was 34.0% in 2023, +0.43ppt year; 4Q23 gross profit margin was 33.8%, year on year +2.2ppt; 1Q24 gross profit margin was 36.1%, year on year +0.1ppt. In 2023, the company's net interest rate to mother was 1.7%, year-on-year +0.49ppt; 4Q23 net profit margin was 4.1%, year-on-year +2.14ppt.
Stock payments and amortization amounts to RMB 35 million in 2023 will affect net profit performance. The amount of goodwill impairment provisions calculated by the company during the reporting period reached RMB 19 million. After excluding the effects of share payments and amortization and goodwill impairment, the company achieved net profit of 86 million yuan attributable to shareholders of listed companies during the reporting period, and profits were gradually recovered.
Breakthrough in core business orders, and the strategy focuses on overseas business. In terms of core business, in 23, the company achieved full coverage of the six major state-owned banks, obtained core business system construction contracts from more than 10 banks, and achieved a breakthrough. Overseas business continued to break through, winning bids for SCB Bank of Thailand's bank-wide core projects and bank-wide transformation projects for major overseas banks, etc., driving both revenue and profit increases. We expect going overseas will bring the company a second growth curve and potentially optimize its business model.
Profit forecasting and valuation
Considering that post-pandemic industry demand was weaker than expected, the 2024 profit forecast was lowered by 67.8% to $64 million, and a 2025 revenue/net profit forecast of $243/132 million was introduced. We are optimistic about the company's core business card position and overseas opportunities, maintain an outperforming industry rating, and lower the target price by 16.6% to 10 yuan. Considering that the company is in a profit recovery period, switching to the 2025 P/E valuation, which corresponds to 55 times 25-year P/E, there is 34.6% upside compared to the current stock price. The current stock price corresponds to 41 times the 2025 P/E.
risks
The promotion of overseas business fell short of expectations, and the distributed transformation of core systems fell short of expectations.
