Incident Overview
The company recently released its 2024 semi-annual report. In the first half of 2024, the company achieved revenue of 0.502 billion yuan, a year-on-year increase of 13.63%, and achieved revenue of 0.248 billion yuan in Q2 alone, an increase of 17.42% over the previous year. In the first half of 2024, the company achieved net profit of 0.052 billion yuan, a year-on-year increase of 32.09%, and achieved net profit of 0.015 billion yuan in Q2, an increase of 127.23% over the previous year. The company achieved double-digit growth on the revenue side and performed well. Profit margins have increased, reflecting strong management capabilities and gradual improvement in business quality.
Performance grew steadily, and the results of contrarian expansion were evident. Operating quality gradually improved. On the revenue side, the company achieved revenue of 0.502 billion yuan in 2024H1, an increase of 13.63% over the previous year.
By industry, the corporate government sector achieved revenue of 0.161 billion yuan, an increase of 13.54% year on year; operator business achieved revenue of 0.135 billion yuan, a year-on-year decrease of 10.37%; and public utilities achieved revenue of 0.084 billion yuan, an increase of 7.94% year on year. The corporate government industry still achieved double-digit growth against the backdrop of pressure from the external environment, which also led to steady growth on the overall revenue side, reflecting the operating results of the company's contrarian expansion strategy. On the other hand, the company's operator business was affected to a certain extent by the pace of revenue recognition, but according to information disclosed in the company's investor relations activity schedule, the company's operator business achieved relatively rapid growth in terms of business development and orders in the first half of the year, and revenue from some orders will be deferred to subsequent quarters. Therefore, we believe that the overall development status of the company is still good, and several major industries are expected to work hand in hand to create more value.
On the profit side, the company's comprehensive gross margin of 2024H1 was 74.24%, an increase of 5.04pct over the previous year. On the one hand, the company itself continued to optimize costs and enhance the core competitiveness of its products. On the other hand, due to changes in the company's product structure ratio, the proportion of products delivered by high-margin applications increased in the first half of the year. Looking at the cost ratio, the sales/management/R&D expense ratio of 2024H1 was 38.29%/4.26%/25.55%, a change of -3.66/+0.19/ -2.01 pct compared with last year. The overall three-fee ratio decreased, which also showed a gradual increase in the company's labor efficiency.
In terms of cash flow, the company received 0.648 billion yuan in cash from selling products and providing labor services in 2024H1, an increase of 39% over the previous year. The net operating cash flow was 0.058 billion yuan, which was positive compared to last year.
On the one hand, the company's good cash flow shows that the company has strengthened repayment and improved operating quality. On the other hand, it has further enhanced the company's resilience to risks and achieved steady operation of the business.
Carrier business is growing well, and AI continues to be empowered
The carrier business forms the main support for the company's business. According to the company's annual report, among operator users, the company's products such as firewalls, intrusion prevention, abnormal traffic cleaning, web application firewalls, vulnerability scanning, and application delivery platforms have been on the centralized procurement lists of the three major operators for many years, and have ranked first in multiple categories many times. In 2023, the company continued to break through in operators' core network business and participated in the construction of core network projects in many places; in multiple scenarios such as operators' cloud security, security services, data security, and traffic analysis, anti-DDoS platform construction continued to lead the market share. The company's products have been used on a large scale in the national networks of the three major operators, including core nodes such as metropolitan area networks, Internet exports, cloud security resource pools, and data centers, and has become the core supplier of network security products in the industry.
AI technology continues to empower the company's business development. According to the annual report, the company continues to improve its technical capabilities in unknown threat detection, malware outreach blocking, API asset identification, and automated operation, injecting new vitality into products such as situation awareness systems, security operation platforms, and API risk monitoring systems. At the same time, the company actively invested in large-scale model research and thoroughly explored its application in actual scenarios, and successfully developed a major anti-telecom fraud model, contributing wisdom and strength to the safe and steady development of the industry.
Investment advice:
Dipu Technology focuses on the field of cybersecurity and application delivery. It is a leading manufacturer in the domestic cybersecurity industry. Currently, the company focuses on high-value customers such as operators, finance, electricity and energy, and is gradually expanding to other customers such as government enterprises. We expect the company to achieve operating income of 1.232/1.475/1.773 billion yuan and net profit to mother of 0.166/0.21/0.266 billion yuan in 2024/25/26. Maintain an investment rating of +-A, and give a 6-month target price of 15.47 yuan, corresponding to a dynamic price-earnings ratio of 60 times in 2024.
Risk warning: downstream customer demand falls short of expectations; technology development falls short of expectations.