Incident: The company released its 2024 mid-year report, with revenue of 1.577 billion yuan, a year-on-year decrease of 19.52%; net profit to mother was 0.449 billion yuan, an increase of 34.84% year-on-year.
The performance was in line with expectations. In the first half of 2024, the company achieved operating income of 1.577 billion yuan, of which: revenue from electronic payment products was 0.443 billion yuan, a year-on-year decrease of 10.77%, a gross profit margin of 43.43%, a decrease of 1.57pct compared to the same period last year; revenue from receipt and value-added business was 1.084 billion yuan, a year-on-year decrease of 19.00% and a gross profit margin of 42.38%, an increase of 13.56 pcts compared to the same period last year, thanks to the company's continuous improvement in the quality of merchant payment services and active expansion of digital services scene.
Overseas business continues to gain strength. The company has obtained the Luxembourg PI license, the Hong Kong MSO license, and the US MSB license, and has the license conditions to simultaneously carry out overseas local receipt business and cross-border payment business. At the same time, the company launched Paykka, a cross-border payment brand, and now has a layout to develop overseas local receipt and B2B foreign trade payment related services.
Continue to expand the AI business. The company jointly funded the establishment of Shanghai Shiyi District Information Technology Co., Ltd., and has now successfully released the first AI “digital employee” product. Through the import and training of enterprise data, the product can generate “digital employees” with different functions according to the requirements of each enterprise management module, and is currently in the commercialization stage.
Investment advice: The company's performance remains stable, and overseas and innovative businesses continue to grow. The company's EPS is expected to be 1.68\ 2.14\ 2.67 yuan in 2024-2026, respectively, maintaining a “buy” rating.
Risk warning: Competition in the billing business intensifies; AI applications fall short of expectations; industry competition intensifies.