Announcement: Seiyou Co., Ltd. released its 2024Q1 quarterly report. According to the quarterly report, 24Q1 achieved revenue of 360 million yuan, yoy +9.7%.
Net profit to mother was 32.78 million yuan, YOY +2.4%. After deducting non-net profit of 27.03 million yuan, yoy +13.1%. The performance was in line with expectations.
24Q1 gross profit margin 63.77% (year-on-year +0.71 pct), net profit margin 9.1% (-0.52 pct year over year). According to the quarterly report, we expect the Q1 B-side confirmed revenue share to be relatively high, and the overall gross margin will be higher.
Non-recurring profit and loss of 5.75 million yuan, a slight increase. According to the quarterly report, it is mainly government subsidies and profit and loss from changes in the fair value of financial assets (4.87 million yuan).
Sales and management expenses decreased year-on-year, and R&D expenses increased slightly. According to the quarterly report, the 24Q1 company's sales, management, and R&D expenses rates were 15.34%, 13.07%, and 29%, respectively. Compared with last year, -0.47pct, -0.82pct, and +0.09pct, respectively, they are within the normal fluctuation range.
Accounts receivable yoy +60.34%. According to the quarterly report, the company's accounts receivable at the end of 24Q1 totaled 223 million yuan, a significant increase compared with 139 million yuan at the end of 23Q1. We believe that the accounts receivable mainly come from the G side. 2024 is the year the fourth phase of gold tax promotion and operation and maintenance starts, and the G side project is expected to usher in a certain increase.
Net cash outflow from operating activities was $360 million. According to the quarterly report, we expect this is mainly due to the Q1 company's payment of year-end bonuses to employees, which can also be confirmed by the drop of 236 million yuan in remuneration payable by the company compared to the end of 23 million yuan.
B-side SaaS is progressing well, with contract liabilities reaching 740 million, further increasing the growth rate. According to the company's announcement, at the end of '23, the company's contract debt was 830 million yuan, and the 24Q1 contract debt was 740 million yuan, yoy +20.9%. The contract debt was mainly B-side SaaS advance receipts, which supports the improvement of the company's B-side business.
With four major strategic priorities in '24, B-side business can be expected. 1) Continue to increase market share; 2) Increase investment in AIGC; 3) Improve the efficiency of excellent tax compliance services; 4) Shift to a platform-based business model and build a large platform for fiscal and taxation services with ecological partners.
Profit forecasting and valuation: Seiyou Co., Ltd. occupied the core card position in the fourth phase of Gold Tax. At the same time, its B-side SME and accounting agency tax reporting SaaS showed a good trend of sharp rise in volume and price, optimizing the company's overall revenue structure. We maintain our profit forecast. We expect the company's revenue for 24-26 to be RMB 2,158, RMB 25.12, and RMB 2,907 billion, and net profit to mother of RMB 2.51, 4.04, and 598 million yuan, respectively. The current market value of the company is 40x, 25x, and 17x for 24-26 PE, respectively, maintaining a “buy” rating.
Risk warning: G-side business profitability recovery falls short of expectations; B-side customer growth falls short of expectations.