Investment events: Recently, the company released its report for the third quarter of 2024. In the first three quarters of 2024, the company achieved operating income of 0.421 billion yuan, a year-on-year decrease of 8%; net profit to mother was 0.101 billion yuan, a year-on-year decrease of 15.60%; net profit after deducting non-return to mother was 0.09 billion yuan, a year-on-year decrease of 15.85%.

Performance is under pressure in the short term, and issuing a dividend plan emphasizes shareholder returns. In the first three quarters of 2024, the company achieved revenue of 0.421 billion yuan, a year-on-year decrease of 8%; net profit to mother was 0.101 billion yuan, a year-on-year decrease of 15.60%. Fluctuations in downstream demand put pressure on the company's performance in the short term. At the same time, the company issued the “Notice on the 2024 Mid-Term Cash Dividend Plan”, which distributed a cash dividend of 2 yuan (tax included) to all shareholders for every 10 shares, with a total dividend of 41,077,395.80 yuan, accounting for 40.58% of the consolidated net profit attributable to shareholders of listed companies for the first three quarters of 2024.

Gross margin remained at a high level, bucking the trend and maintaining high R&D investment. The company's gross margin remained high, reaching 70.58% in the first three quarters of 2024, an increase of 0.06% over the same period last year. In the first three quarters of 2024, the company's sales/management/R&D expenses ratio was 10.8%/16.82%/27.69%, respectively. In terms of R&D investment, the company continues to insist on research on key financial technologies, focus on research and development of core products, and maintain high investment against the trend.

Launched the HTS 2X Pure Blood Xinchuang Edition to continue to empower financial credit innovation. At present, Financial Xinchuang has entered the “deep water zone”. As a pioneer in financial credit innovation and a leader in the new trading system, the company has cooperated deeply with Huawei and Tencent Cloud to create the HTS2X Pure Blood Credit Innovation Edition. From software to hardware, the full stack Xinchuang configuration has achieved significant improvements in various dimensions such as performance, business carrying capacity, reliability, and operation and maintenance experience.

Investment advice: We forecast that the company's revenue for 2024-2026 will be 0.831/0.937/1.065 billion yuan, and net profit to mother will be 0.271/0.319/0.376 billion yuan, respectively. The corresponding PE is 30/26/22 times, respectively, maintaining a “buy” rating.

Risk warning events: business development falls short of expectations, slow policy progress, untimely data updates, etc.