occurrences
Panmicro Network released its 2024 semi-annual report. In the first half of 2024, the company achieved revenue of 0.886 billion yuan, a year-on-year decrease of 2.16%; net profit to mother was 0.047 billion yuan, up 22.99% year on year; net profit after deducting non-return to mother was 0.032 billion yuan, up 45.69% year on year; gross margin was 93.63%, down 0.14 pct year on year. In the second quarter of 2024, the company achieved revenue of 0.542 billion yuan, a year-on-year decrease of 5.24%; net profit to mother of 0.019 billion yuan, a year-on-year decrease of 48.81%; net profit after deducting 0.015 billion yuan, a year-on-year decrease of 49.35%; and gross margin of 93.34%, a year-on-year decrease of 0.17pct.
Technical services grew steadily, improving the multi-level marketing service system. In the first half of 2024, e.office revenue was 0.009 billion yuan, down 1.53% year on year, and gross margin increased 0.14 pct year on year; e.cology's revenue was 0.288 billion yuan, down 17.84% year on year, and gross margin increased 0.12 pct year on year; technical service revenue was 0.545 billion yuan, up 9.43% year on year, and gross margin increased 0.30 pct year on year; revenue from third party products 0.042 billion yuan, down 8.74% year on year, gross margin decreased 5.38 pct year on year. With the strategic goal of “adding 100 cities, developing new products, and expanding overseas”, the company has further improved the multi-level marketing service system in various market regions, and has initially established an international operation system to support the development of overseas institutional business.
In terms of developing and optimizing the intelligent middleware platform and accelerating the expansion of Xinchuang ecosystem compatible AI products, the company continues to develop and optimize the Xiaoe (LLM version) - smart middleware platform. On the basis of gradually improving application scenarios such as intelligent Q&A, smart office, and intelligent tools, it will continue to cultivate in the field of intelligent collaborative management. On the Xiaoe platform, users can build natural language interaction (LUI) data applications without a threshold.
In terms of government affairs, the company continues to focus on Xinchuang product research and development, deepening the adaptation of Xinchuang around the new E10 platform, and launched e-Builder, a low-code development platform based on the full-stack Xinchuang environment. It has completed the adaptation and mutual recognition work of more than 150 Xinchuang partners, further expanding the platform's ability to adapt to the Xinchuang ecosystem and the scope of product delivery.
Investment advice
Considering the pressure on downstream demand, we adjusted the company's 2024-2026 revenue to 2.333/2.424/2.632 billion yuan, respectively, with year-on-year growth rates of -2.54%/3.94%/8.55%, and net profit to mother of 0.206/0.253/0.308 billion yuan, respectively. The year-on-year growth rates were 15.39%/22.55%/21.80%, EPS was 0.79/0.97/1.18 yuan/share, respectively, and 3-year CAGR 19.87% In view of the company's stable position as a leading OA software in China, it is recommended to continue to promote AI-enabled office products and promote the implementation of Xinchuang applications.
Risk warning: market competition risk, industry risk, human resources risk.