Investment events: Recently, the company released its 2024 semi-annual report. With 2024H1, the company's revenue reached 0.704 billion yuan, down 5.99% year on year; net profit reached 0.002 billion yuan, up 118.44% year on year; net profit to mother was 0.002 billion yuan, up 118.48% year on year.
Revenue fluctuated in the short term, and order performance was impressive. 2024H1, the company's revenue reached 0.704 billion yuan, a year-on-year decrease of 5.99%. The main reason was that the company won bids for several large-scale projects, and the project implementation period was between 12 and 24 months, causing short-term fluctuations in revenue. By business, the company's digital finance business solution revenue was 0.454 billion yuan, down 3.48% year on year; big data application system solution revenue was 0.209 billion yuan, down 11.84% year on year; and full financial value chain business management solution revenue was 0.041 billion yuan, down 1.37% year on year. On H1 in 2024, the company successively won large bids. Among them, the digital finance business line won multiple 10-million-level projects, implementing products including core banking systems, credit card systems, and channel systems; the full financial value chain business successively won bids for a trillion-level urban commercial bank in central China, a provincial agricultural and commercial cooperative, and a leading agricultural commercial bank in South China.
Gross margin continued to rise, and fee control results were remarkable. 2024H1, the company's gross margin reached 38.07%, an increase of 1 over the same period last year.
73%, mainly due to the increase in gross margin of products related to overseas business. From the cost side, the company's sales/management/R&D expenses rate decreased by 1.07%/0.06%/1.24%, respectively, compared with the same period last year. The fee control results were remarkable. In the future, the company will continue to adopt measures such as reducing costs, increasing efficiency, controlling fees, and improving management standards to improve profit levels.
Continue to develop overseas business and sign large overseas orders. Since 2017, the company has continuously increased resource investment in overseas business and expanded the Southeast Asian market through various methods such as mergers and acquisitions, cooperation, and self-construction. Currently, the company has established representative offices in countries such as Thailand, Malaysia, and Indonesia. In May 2024, the company signed a formal agreement with Huishang Bank of Thailand, with a total amount of 49.6 million US dollars, demonstrating the company's influence and competitiveness in the Southeast Asian market.
Investment advice: We forecast that the company's revenue for 2024-2026 will be 2.23/2.645/3.193 billion yuan, respectively, and net profit to mother will be 0.094/0.131/0.177 billion yuan, respectively. The corresponding PE is 67/48/35 times, respectively, maintaining the “buy” rating.
Risk warning events: business development falls short of expectations, slow policy progress, untimely data updates, etc.