Yuxin Technology: 24Q1 revenue yoy -24.25%, net profit to mother yoy -23.29%
Yuxin Technology achieved revenue of 601 million yuan (yoy -24.25%) in Q1 of 2024, net profit of 32.1129 million yuan (yoy -23.29%), after deducting non-net profit of 31.255 million yuan (yoy -15.21%); net operating cash flow was -299 million yuan, +31.86% year-on-year. Maintaining the company's profit forecast, the company's 2024-2026 EPS is expected to be 0.57/0.71/0.86 yuan, respectively, corresponding to PE 23/18/15 times, and the company's 2024 average PE is 31 times (Wind), giving the company a 2024 target PE 31 times (previous value of 14.94 yuan), and a corresponding target price of 17.81 yuan (previous value of 14.94 yuan).
The decline in system integration revenue dragged down revenue growth. Excluding share payments minus non-net profit yoy +26.89%, 24Q1's system integration business revenue decreased by 50% year on year, causing a drag on the overall revenue growth rate. The gross margin of the 24Q1 software development business increased by 1.5 pct year on year. At the same time, due to the increase in the share of software development business revenue, the company's comprehensive gross margin increased by +4.41 pct to 26.41% year over year. The 24Q1 period/sales/management/R&D expense ratio was 23.34%/3.35%/11.85%/9.48%, compared with +0.08pct/+3.93pct/+1.59pct. The increase in the cost ratio was mainly due to the increase in 24Q1 share payments. The 24Q1 share payment was 15.5171,000, and 23Q1 was 0. In fact, the company continued to reduce costs and increase efficiency during 24Q1, resulting in a year-on-year reduction in all expenses excluding share payment fees. The company's non-net profit after excluding share payment fees was 46.76676 million, an increase of 26.89% over the previous year.
Banking IT: There is more demand for customized services. The industry enters a period of integration and differentiation. Demand for digital transformation in the banking industry continues to be strong in 2023, but it also places higher demands on the customized services and governance capabilities of IT service providers. It is expected that in the next three to five years, the banking IT industry will enter a period of integration and differentiation, and the advantages of leading manufacturers will become more obvious. In 2023, Yuxin actively selected high-quality projects. With product advantages such as credit, data, channels, and supervision, new software orders in 2023 increased 5% year-on-year. At the same time, the company has increased its business layout such as financial credit innovation, overseas markets, and innovative operations, with remarkable results.
2024 outlook: Financial Credit Innovation, comprehensive overseas expansion, and generative AI are the company's three major driving forces. As Financial Credit Venture moves from general business to core business, Financial Credit Innovation will continue to be one of the company's most important industry opportunities in 2022. The company's overseas business has begun to harvest. Solutions such as digital credit, scenario finance, and digital channels have received good feedback in the Southeast Asian market, won relevant orders, and is expected to achieve rapid growth in 24 years. Through cooperation with Big Model Company, the company pioneered the launch of the first batch of large-scale model application products and solutions in the financial industry, including 4 application-level products and 1 development platform, and also launched the Usin All-in-One PC. Generative AI in 2024 will bring the company more business opportunities to reduce costs and increase efficiency.
Risk warning: Banks' IT spending falls short of expectations; the pace of credit innovation falls short of expectations; market competition intensifies.