The company is based on financial insurance and is a leader in software IT services. The company was founded in 1994. At the beginning of its establishment, it mainly provided software subcontracting services to foreign customers. In 2007, it began two-way expansion at home and abroad, expanding its services to many other fields. In 2015, with the rapid development of high-tech technologies such as cloud computing, the company continued to integrate these new technologies into its products and services, actively expanded its business areas, and used its technology and experience in other industries such as telecommunications, medical care, automobiles, etc., to provide users with unique IT solutions. The company's revenue has been growing steadily in recent years. The three major industries of downstream customers account for about 30% of the revenue from insurance, banking and other financial and corporate services industries.
Demand for insurance IT is expected to expand. On April 12, the Securities Regulatory Commission issued a new “National Article 9”. Section 7 mentions the need to optimize insurance fund investment policies, improve supervision and encourage long-term investment, enhance the flexibility of pension and pension investment, and encourage bank wealth management trusts to enter the market. In the context of the country's support for financial industry regulations, the digital transformation of financial institutions such as banking and insurance is also becoming increasingly important. With the growth rate of insurance companies' premium income slowing down in recent years, insurance companies are also paying more attention to reducing costs and increasing efficiency through technological innovation methods and improving marketing efforts. Big data and artificial intelligence have also become the two leading innovation directions that Insurance is focusing on. At the same time, with the implementation of the new IFRS 17 regulations, insurance companies' financial data disclosure standards have undergone major revisions, and new requirements have also been put forward for insurance companies' IT systems. With a combination of factors, the demand for insurance IT is expected to expand.
The development of artificial intelligence has brought more industry opportunities, and the application of big models in the industry is accelerating. Since the introduction of ChatGPT more than a year ago, the field of artificial intelligence in China has ushered in rapid development. Various large models have emerged continuously, and it has gradually entered the stage of implementation in the industry. Various financial institutions and financial IT companies have launched their own large-scale models and application products, and the industry is in full swing. The company is also actively developing in the AI field and has built the Xinzhi Xizhi 2.0 artificial intelligence platform, which relies on the “knowledge base”, “big model” and “software robot” technology system to help users quickly implement big model applications. On the product side, the company also continues to explore and innovate, and has launched intelligent software and hardware integrated product smart work cards for insurance marketing, providing various ideas for implementing AI. At the same time, the company also joined hands with Huawei Shengteng to launch the Shengteng all-in-one computer, which is based on AI computing power and pre-installed with various large models to be used right out of the box, providing AI integrated computing power for all walks of life.
We predict that the company's earnings per share for 24-26 will be 0.53, 0.76, and 1.04 yuan. Based on comparable company valuations, the company was given a price-earnings ratio of 30 times in 2024, corresponding to a reasonable stock price of 15.90 yuan, and a purchase rating for the first time.
Risk warning
AI technology implementation falls short of expectations, policy implementation falls short of expectations, accounts receivable account for relatively high risk, macroeconomic environment risk