Overseas revenue and 3D product orders increased in 24Q1. Maintaining the “Buy” rating, Zhongwang Software published annual reports and quarterly reports. In 2023, it achieved revenue of 828 million yuan (yoy +37.71%), net profit to mother of 61.4064 million yuan (restated yoy +922.84%), and deducted non-net profit of 777.402 million yuan.
The acquisition of Bochao combined revenue of 96 million yuan. 24Q1 revenue of 120 million yuan (yoy +3.84%), net profit to mother of 25.611,000 yuan (yoy -44.94%), deducted non-net profit of 78.297 million yuan (yoy -53.32%).
Fluctuations in downstream demand affect revenue growth. In 24Q1, revenue from overseas markets also increased by nearly 50%, and order amounts from ZW3D also increased by more than 40%. We expect the company's 2024-2026 EPS to be 0.91, 1.37, and 1.53 yuan respectively. Comparable to the company's 2024 average of 15.8xPS (Wind), the 202415.8xPS will be given, and the target price will be 125.85 yuan to maintain the “purchase”.
CAE and enterprise 3D revenue grew rapidly, continuing to consolidate core technology by product line. 2D CAD revenue in 2023 was 472 million yuan, up 16.5%; 3D CAD revenue was 188 million yuan, up 16.3%; CAE revenue was 7.15 million yuan, up 209.7%, and Bochao series products were 33 million yuan; by customer type, domestic commercial market revenue in 2023 was 501 million yuan, up 43.7%; education market revenue was 166 million yuan, up 4.9%; 2D enterprise sector revenue At 405 million yuan, an increase of 25.1%, the 3D enterprise sector's revenue was 134 million yuan, an increase of 28.4%, and the enterprise sector grew rapidly; the company continued to promote product iteration and continue to consolidate and strengthen ZW3D's key core technologies, further improving ZW3D's design capabilities and efficiency in complex application scenarios. We believe that in the future, as products are gradually refined and mature, the room for growth can be further opened up.
Overseas market revenue is growing rapidly, and attention is being paid to the effectiveness of channel construction
By region, domestic market revenue in 2023 was 666 million yuan, up 31.6%; overseas market revenue was 157 million yuan, up 71.1%; the company continued to promote overseas localization strategies and optimize the global channel provider network system. In 2023, the company set up new local offices in many countries in Asia and Europe, and overseas market revenue increased rapidly; in 2023, direct sales market revenue was 504 million yuan, an increase of 46.3%; distribution market revenue was 320 million yuan, an increase of 25.8%, according to the company According to the annual report, the revenue growth rate contributed by the distribution team to the company in 2023 is faster than that of the direct sales team (excluding Beijing Bochao). We believe that as the results of the company's channel construction gradually become apparent, revenue growth is expected to accelerate.
The underlying platform or accelerated iteration, AI technology combined with the product
In 2023, 3D industry solutions based on the Goku platform have been initially commercialized and trials have begun to be offered to potential partners. We believe that the underlying platform is expected to be improved at an accelerated pace as customers iterate. In 2023, the company set up a professional artificial intelligence R&D team to develop functions such as “intelligent command recommendation”, “intelligent model search”, “automatic code generation”, etc., which are expected to be gradually introduced in the new ZWCAD and ZW3D products released in 2024. We believe that in the future, with the gradual integration of AI technology and products, the product usage threshold is expected to be lowered and product promotion will be accelerated.
Risk warning: Risk of fluctuations in downstream demand; 3D CAD products are not progressing as expected.