occurrences

The Company recently received the text of the contract signed with the Bank of Thailand (SCB). SCB intends to purchase products and services from the Company to implement and maintain SCB's new core banking system (“Project”). The total contract amount is US$49.6 million (tax included, converted at an exchange rate of 7.1106, approximately RMB 352.6858 million).

reviews

SCB is Thailand's leading commercial bank. The core system project is a landmark development in the company's overseas expansion. Currently, the core systems that the company can provide overseas include traditional core systems and Internet core systems that meet banks' digital transformation needs and are used for bank internet services. China is leading the digital development of finance. The company took the lead in entering the Southeast Asian Internet core system market through technical advantages and won bids for several major Southeast Asian Internet core system projects.

The company won the bid for the SCB Bank core system, which marks an important breakthrough in the company's traditional core system business. SCB Bank is Thailand's first commercial bank and the top three commercial banks.

The traditional core system has a large order volume, which is expected to bring more overseas revenue to the company.

Overseas customers are willing to pay well and have great market potential

Bank IT systems in Southeast Asia are mainly provided by local enterprises and European and American companies. The pricing method of the software system is based on European and American companies, mainly commercialized delivery, and the gross margin of mature products is high. In terms of the billing model, overseas customers are willing to pay for software and maintenance, and the SaaS model is on the rise, so it is expected to bring long-term stable income to bank IT companies.

The Bank of Southeast Asia's original system is old, making it difficult to adapt to the trend of internetization and digitalization. In the context of inclusive finance and digital banking transformation, the core system needs to be upgraded; at the same time, European and American manufacturers have problems with expensive systems and untimely services. This gave domestic companies an opportunity to expand overseas markets.

Going overseas requires years of intensive cultivation, and the company has a first-mover advantage

Overseas banks require a higher degree of commercialization of bank IT. They need to set up localized delivery teams and thoroughly understand local policies and regulations, cultural customs, consumer preferences, language issues, etc., and establish overseas benchmark projects to win customer trust, and jointly build barriers to going overseas.

The company began to lay out overseas markets along the “Belt and Road” in 2016. Currently, several leading Southeast Asian banks and digital banks have defeated established European and American financial IT giants and Southeast Asian financial IT giants, and won multiple project orders.

Profit forecasting and valuation

The company's revenue is expected to reach 20.92, 25.25, and 3,028 billion yuan in 2024-2026, with year-on-year growth rates of +9.08%, +20.72%, and +19.90%; net profit to mother is 1.21, 2.21, and 330 million yuan, respectively, with year-on-year growth rates of +276.63%, +82.48%, and +49.53%, corresponding to 44 times PE in 2024.

Risk warning

R&D falls short of expectations; overseas competitive environment deteriorates; overseas policy uncertainty; rising personnel costs