Main points of investment:
Announcement: the company announced the 2020 annual report, operating income 8.533 billion yuan, yoy + 20.81% (of which, 2020Q4 is 3.808 billion yuan, yoy + 53.64%); return to the mother net profit of 369 million yuan, yoy + 9.94% (of which 2020Q4 is 291 million yuan, yoy + 12.13%). The performance is in line with the forecast.
2020 performance is in line with expectations, the income structure has improved, and great security is the core driver of growth. Security revenue in 2020 is mainly recognized in Q4, with a quarterly revenue growth rate of 53.64%. During the reporting period, the company's revenue from network security and self-controllable business reached 3.122 billion yuan, an increase of 71.11% over the same period last year, accounting for 36.58% of the total revenue, making it the biggest bright spot of the year.
The company set up the leading group of Xinchuang work in 2020, and the business of Xinchuang has achieved rapid growth throughout the year, with a contract value of nearly 7 billion yuan.
Among them, the database market share is more than half.
Gross profit margin fell 1.83pct to 22.69%, mainly due to the increase in the share of Xinchuang integrated revenue. Gross profit margin is expected to rise steadily in 2021. 1) the company has clearly focused on the quality of development and will choose projects with higher gross profit margin in the future; 2) the major security projects in 2020 will mainly be replaced by electronic documents with low difficulty, and the share of applications is expected to increase after 2020; 3) after 2021, the regional market can cooperate with local partners to control costs through outsourcing.
The R & D expenditure increases rapidly, which is expected to be mainly invested in the direction of innovation; other expenses are stable. Sales expenses increased by 15.99% over the same period last year, due to market expansion and an increase in sales personnel; management expenses decreased by 1.43% compared with the same period last year, due to an increase in personnel costs; and R & D expenses increased by 83.15%, which is expected to be mainly due to increased R & D in innovative business during the transition period. On the whole, the cost increases rapidly, considering the improvement of the income structure, the large security business is in the important promotion period, and the proportion of income increases, and the growth rate is still in a reasonable range.
The return of the project is better than expected, and the operating net cash flow is significantly ahead of the net profit. Due to the slow payback of some projects in 2019, the operating cash flow changed from positive to negative, and the project payback in 2020 was much better than expected, with a net operating cash flow of 1.084 billion yuan and a substantial lead in net profit of 369 million yuan. Specifically, the cash received mainly for the sale of goods and services was 8.816 billion yuan, a substantial improvement compared with 7.106 billion yuan in 2019.
Maintain a "buy" rating. Cut into the larger market space of the government cloud, big data, big security and other directions, a larger investment in the transition period. Maintain the profit forecast from 2021 to 2022 and increase the profit forecast for 2023. It is estimated that the operating income from 2021 to 2023 will be 99,103 and 10.9 billion yuan, and the return net profit will be 5.87,6.31 and 716 million yuan. Maintain a "buy" rating.
