21-year performance is expected to accelerate the release
In 2020, the company steadily promoted its main business in the fields of government, military industry, e-government and state-owned enterprises, and carried out the top-level layout and planning of the identity authentication system in an orderly manner. The company has constructed the market planning of "Xinchuang" product system, and gradually strengthened the market expansion of Smart things and the construction of video security system based on PKI. At the same time, the company will further expand the field of zero trust and promote the implementation of the zero trust pilot project. We believe that in the past 20 years, the company has made a large investment in zero trust, "Xinchuang" and video security, and the 21-year performance is expected to be accelerated. It is estimated that the EPS of the company from 2020 to 2022 will be 0.44,0.64,0.82 yuan respectively, maintaining the "overweight" rating.
Contract liabilities show that the inflection point has emerged, and the three major points of interest in the past 21 years are still the same.
By the end of the third quarter, the company's contract liabilities were 190 million yuan, an increase of 138% over the same period last year. From the point of view of the composition of contract liabilities, it is basically the income of traditional PKI projects. considering that there may be a cross-year situation in the revenue recognition of projects, we believe that the continuous expansion of 20-year contract liabilities is expected to lead to the rapid growth of 20Q4-21Q2 revenue. Point 1: at present, the main customers of PKI manufacturers are concentrated in ministries, central military enterprises and provincial government agencies. We believe that as the PKI system is expected to gradually infiltrate into local government departments and branches of central enterprises, there is still a lot of room for traditional business. Point two: the company "Xinchuang"
The business is expected to further contribute to the performance increment. Point 3: the public security department began to pilot video security construction based on PKI.
The landing of zero trust is expected to become a new round of growth.
On November 10, 2020, the Ministry of Industry and Information Technology issued a public announcement on the pilot demonstration list of network security technology applications in 2020. The project "Aviation Industry Business Network Zero Trust Security Management platform", which was jointly declared by the company and AVIC Jinwang (Beijing) Electronic Commerce Co., Ltd., was successfully selected into the category of "New Information Infrastructure Security-Industrial Internet Security". Combined with the company's business, (1) zero trust is highly related to PKI, which is to solve the problem of user identity authentication in customers'IT system; (2) with the improvement of the utilization of private cloud and hybrid cloud by the company government and military customers, there is a replacement demand for PKI from zero trust.
Domestic PKI leader, maintain "increase"
Due to the large investment in sales and R & D in the past 20 years, we downgrade our profit forecast and estimate that the net profit from 2020 to 2022 will be 0.84,1.24 and 159 million yuan respectively (previous value: 0.99,1.30,165 million yuan). Considering the completion of the company's fixed growth, we expect the company's EPS to be 0.44,0.64,0.82 yuan respectively from 2020 to 2022 (the previous value is 0.51,0.67,0.86 yuan based on the new equity), and the current share price corresponds to PE of 53-36-28 respectively. With reference to comparable company valuations, the average of 21-year PE consensus expectations is 39 times. Give the company 39 times PE in 21 years, corresponding to the target price of 24.96 yuan (the previous value is converted to 33.66-36.72 yuan according to the new equity), and maintain the "overweight" rating.
Risk hint: the information security policy is not as expected; the video security is not as expected and the risk is reduced.