New strategy and new journey, the proportion of software increases. Henghua Technology was founded in 2000 and listed on the Shenzhen Stock Exchange in 2014. The company is based on the power industry, around water conservancy, transportation and other fields, providing three-dimensional design, intelligent cost, intelligent infrastructure, distribution power operation, energy management, big data analysis and other series of SaaS products, put forward a new strategy "BIM platform software and industry digital application service provider" in 2020. The company's software sales business increased from 36 million yuan in 2015 to 108 million yuan in 2019, with a compound growth rate of 31.61 percent in four years. We believe that with the continuous enrichment of the product line, the company is expected to become a manufacturer of 3D design software platform based on BIM in the future.
Growth and cash flow are gradually repaired. Over the past five years, Henghua's revenue and return net profit have grown by nearly 40%. In 2020, Q3 achieved operating income of 271 million yuan, an increase of 25.51% over the same period last year. Against the background of the epidemic, Q3 began to reverse the year-on-year decline trend since 2019Q3, and deducted non-return net profit of 60.012 million yuan, an increase of 61.77% over the same period last year. 20Q3's performance growth was mainly due to the good recovery of the design board business, especially the company's layout in the three-dimensional software market, which played a good role in driving the business in the third quarter.
The net cash flow generated by 20Q3 operating activities was 250 million yuan, an increase of 627.25% over the same period last year. In the first three quarters of 2020, the net cash flow generated by operating activities was 177 million yuan, an increase of 178.11% over the same period last year.
Look at Henghua from Autodesk, Bentley, Zhongwang Software and PCCW. From the point of view of the development of Autodesk and Bentley, we think that they have experienced the process of "standardized products-rich product lines-multi-industry expansion-SaaS", and Henghua Technology is also in such a process. The growth of Autodesk and Bentley is enough to explain the prosperity of demand in their industry. PS, which is about 20 times in US stocks, also shows that the market is optimistic about it. Henghua will continue to have more room for growth and valuation in the future. Zhongwang Software has also experienced from two-dimensional to three-dimensional, enriching its product line with the help of mergers and acquisitions, constantly expanding its industry, and paying attention to the international market, which is very similar to Henghua Technology. From the perspective of PCCW, the company has obvious valuation advantages. we think that Henghua will focus more on industrial software with large scenes in the future.
Profit forecast and investment advice. We believe that the company's overall product standardization, software proportion and cloud degree continue to improve, profitability and cash flow are gradually recovering, BIM 3D design, energy information, industrial software are all in the upward channel, and the company is also carrying out multi-industry expansion at the same time. From the point of view of Autodesk and Bentley, there is still a lot of room for the company's future growth and valuation, and the 100 million yuan buyback also fully shows the confidence of management. We predict that the operating income of the company from 2020 to 2022 will be 1.446 billion yuan, the net profit of return to the mother will be 3.91 million yuan, and the corresponding EPS will be 0.35, 0.50 and 0.64 yuan, respectively. Refer to the comparable company, give 2021 dynamic PE25-30 times, 6-month reasonable value range of 12.5-15.0 yuan, maintain the "better than the market" rating.
Risk hint. Under the influence of the epidemic, business progress is not as expected, electricity distribution reform is lower than expected, SaaS progress is slow, accounts receivable and cash flow deteriorate, and so on.