Performance performance

The company published its 2024 interim report on August 28, 2024

[Overall performance]

(1) Revenue for the first half of 2024 was 0.352 billion (+22.41%), net profit due to mother 0.103 billion (+40.68%), net profit not attributable to mother 0.095 billion (+43.09%).

(2) 24Q2 revenue 0.186 billion (+18.76%), net profit to mother 0.048 billion (+19.45%), net profit not attributable to mother 0.044 billion (+25.98%).

[Business Segmentation]

By product

2024H1 office software product license revenue is 0.334 billion (+27.24%), revenue from big data applications and comprehensive industry solutions is 0.0004 billion (-96.14%), revenue from operation and maintenance services is 0.015 billion yuan (+31.09%), and database all-in-one computers are 0.002 billion yuan (+19.30%).

[Gross profit margin, cash flow]

2024 H1 gross profit margin 97.16% (up 1.41 pct year on year), 24Q2 gross profit margin 97.22% (up 2.11 pct year on year);

2024H1 net operating cash flow 0.007 billion (-80.16%), 24Q2 net operating cash flow 0.062 billion (+199.86%).

[Fee rate]

In 2024, the H1 sales/management/R&D expense ratio was 38.83%/12.79%/26.13%, the sales expense ratio decreased by 3.16 pct year on year, the management expense ratio increased by 0.18 pct year on year, and the R&D cost rate decreased by 0.15 pct year on year.

In Q2 2024, the sales/management/R&D expense ratio was 39.59%/14.34%/26.04%, the sales expense ratio decreased by 1.30 pct year on year, the management expense ratio increased by 1.83 pct year on year, and the R&D cost rate increased by 1.57 pct year on year.

Note: The year-on-year growth rates are shown in parentheses

Performance reviews

Gross margin reached a record high, and both revenue and profit increased

The company's 24H1 revenue reached 0.352 billion, up 22.41% year on year, and net profit to mother reached 0.103 billion yuan, up 40.68% year on year. Meanwhile, the company's gross margin for H1 in 2024 was 97.16%, up 1.41pct year on year, 24Q2 gross margin was 97.22%, up 2.11pct year on year, which is a record high.

We believe that the company insists on developing core technology. Under the promotion of Xinchuang's general environmental policy, the party, government and industry are expected to continue to generate demand for domestic databases. As the company's profitability continues to increase, revenue and profit are expected to continue to increase throughout the year.

The high dividend rate shows the company's confidence in long-term development

According to the company's mid-term dividend plan for 24 years, the company plans to distribute a cash dividend of 11.00 yuan for every 10 shares, and the total share capital of the company is 76 million shares. Based on this calculation, the total cash dividend to be distributed is 83.6 million yuan, accounting for 81.02% of the net profit attributable to shareholders of the parent company in the company's 2024 semi-annual consolidated statement.

We believe that the company's dividend shows the company's confidence in long-term development and can continue to give back to shareholders. Based on the company's leading position in the Chinese database, the company is expected to steadily create value for shareholders.

Profit forecasting and valuation

We expect the company to achieve revenue of 0.924/1.086/1.292 billion yuan in 2024-2026, with year-on-year growth rates of 16.33%/17.55%/18.90%, respectively; corresponding net profit to mother of 0.354/0.43/0.531 billion yuan, respectively, with year-on-year growth rates of 19.57%/21.33%/23.74%, corresponding EPS 4.66/5.65/6.99 yuan, corresponding PE 49.37/40.69/ 32.89x

Risk warning

The risk that the promotion of the credit and innovation policy falls short of expectations, the risk of technological innovation and new product development, the risk of market competition falling short of expectations, and the risk of rising labor costs.