Incident: The company released its 2023 annual report, with revenue of 3.801 billion yuan, a year-on-year decrease of 11.94%; net profit to mother was 755 million yuan, an increase of 1588.44% over the previous year.
The company released its 2024 quarterly report, with revenue of 783 million yuan, a year-on-year decrease of 22.74%; net profit to mother was 221 million yuan, an increase of 66.40% over the previous year.
Profitability increased significantly. In 2023, the company's gross sales margin was 38.80%, an increase of 13.53 percentage points over the same period last year; the sales expense ratio, management expense ratio, and R&D expense ratio were 7.54%/6.39%/7.27%, respectively; the net interest rate was 19.84%, up 18.81 percentage points from the same period last year; the net operating activity flow was 1,133 million yuan, compared with 253 million yuan in the same period last year.
Continue to expand overseas business and build scenario SaaS. In 2023, the company's payment equipment business company's revenue in the overseas market of electronic payment devices continued to grow. The gross profit of the overseas market of electronic payment devices increased by 18.70% year on year; the overseas market achieved shipments of 4.4639 million units, an increase of 48.63% over the previous year. Paykka, the company's newly launched cross-border payment product, already supports payment services in 10+ mainstream global currencies and 150+ global billing services.
Continue to expand the AI business. In addition to exploring AIGC, the company also co-funded the establishment of Shanghai Shiyi District Information Technology Co., Ltd. with Shanghai Weisha Network Technology Co., Ltd., to set up an artificial intelligence research team, carry out research and development of general intelligence technology, and develop multi-modal AI products.
Investment advice: The renewal of the payment license was successfully completed in 2023, and the results were drastically reversed.
The company's EPS is expected to be 1.65/1.93/2.43 in 2024-2026, maintaining a “buy” rating.
Risk warning: Competition in the billing business intensifies; AI applications fall short of expectations; industry competition intensifies.