Brief performance review

On August 28, 2024, the company disclosed its 2024 interim results: the company achieved revenue of 0.15 billion yuan in the first half of 2024, an increase of 0.1% year on year; net profit after deducting the impact of financial expenses was 0.08 billion yuan, down 17.9% year on year; net profit without financial expenses deducted was 0.06 billion yuan, down 7.6% year on year.

In the second quarter of 2024, the company's revenue was 0.08 billion yuan, down 7.0% year on year; net profit without deducting financial expenses was 0.04 billion yuan, down 32.5% year on year; net profit after deducting financial expenses was 0.03 billion yuan, down 23.1% year on year.

Management analysis

By business, To C's securities information service was 0.03 billion yuan, an increase of 0.4% year on year; the sum of To B software sales and maintenance services was 0.11 billion yuan, up 1.3% year on year, mainly because the company helped the digital transformation of the securities industry with commercial secret transformation, Xinchuang software, and “multi-terminal collaborative digital platform”, and added a new bond market transaction data access service.

In terms of costs and expenses, the sum of the company's costs and expenses in the first half of the year was 0.08 billion yuan, up 8.8% year on year. Among them, sales and management expenses all declined, but R&D expenses increased by 30.1% year on year, mainly due to the increase of 0.01 billion yuan in direct investment in R&D in the current period compared to the same period last year. The company's investment income in the first half of the year increased by 0.02 billion yuan over the same period last year, mainly due to the company's new technology investments and the increase in income from financial management plans and trust plans in cash management in the current period.

Profit Forecasts, Valuations, and Ratings

According to the 2024 mid-year report, we expect revenue from 2024 to 2026 to be 0.43/0.42/0.42 billion yuan, up -1.4%/-2.3%/0.8% year on year; net profit to mother will be 0.31/0.28/0.29 billion yuan, respectively, up -0.9%/-8.1%/1.6% year over year, corresponding to 48.6/52.9/52.0 times PE, maintaining the “buy” rating.

Risk warning

The pace of implementation of national secrets reform or financial credit innovation falls short of expectations; C-side business development falls short of expectations; risk of fair value reduction of investment products.