Events:

The company released the 20-year annual report and the 21-year quarterly report. In the past 20 years, the company achieved operating income of 445 million yuan, an increase of 20.04% over the same period last year, and a net profit of 57 million, down 18.55% from the same period last year. In the first quarter of 21, revenue reached 73 million, an increase of 45.77% over the same period last year, and the return net profit was-24 million, an increase of 11.91% over the same period last year.

The operating cash flow has improved significantly over the past 20 years. The company's net operating cash flow has increased by 146 million in the first quarter, an increase of 77.29% over the same period last year, and the repayment of operating activities has improved significantly. The contractual liability (original accounts received in advance) is 190 million, an increase of 71.17% over the same period last year. The company's home net profit decreased by 18.55% compared with the same period last year, mainly because the operating cost increased by 30.01% compared with the same period last year, and the cost growth rate was higher than the revenue growth rate. We believe that the faster cost growth rate is related to the increase in the proportion of general safety products business, but the gross profit margin of this business is relatively low. The company's revenue in the first quarter of 21 increased by 45.77% compared with the same period last year. We believe that the rapid growth in the first quarter shows that the company's business demand is strong, and the business of Xinchuang is developing smoothly. The company's revenue operating target for 21 years is 570 million (we think it is a conservative target).

Maintain the investment in technology research and development and actively lay out the emerging areas

The company's R & D expenses increased by 25.88% compared with the same period last year, and the R & D expenditure rate increased by During the reporting period, the company released a number of new products, such as zero-trust security gateways, providing customers with digital transformation with multi-cloud and multi-stack zero-trust network security and data asset security solutions, as well as V2X security solutions and related products. actively lay out the field of car networking. We believe that the company will continue its market layout in the areas of car delivery networking, industrial Internet, cloud computing, etc., focusing on strengthening the landing of data security projects, increasing market investment in independent innovation products, and enhancing the company's scientific and technological innovation capability.

Xinchuang driven performance is expected to grow rapidly in the future, zero trust to promote medium-and long-term business model change the company year-round in the party, government, military enterprises and other areas to promote information security products, has a rich customer trust base.

It is expected that the high-speed growth of performance driven by Xinchuang in the past three years is a high probability event. At the same time, the company continues to strengthen the expansion of zero-trust field solutions, promote the implementation of zero-trust pilot projects, and look forward to the general trend of zero-trust industry in the next three to five years. We are optimistic that the company will become China's Okta, to realize the change of business model from products to SaaS.

Investment suggestion

Taking into account the company's business objectives for 21 years and the time for Xinchuang to confirm revenue in the future, it is expected that the company's personnel growth will still be in a period of rapid expansion, and the expense rate will be in a high position in the future. We adjust our profit forecast that the revenue for 21-23 will be adjusted from 5.4pm 1.336 billion yuan to 841max million. The net profit of homing was adjusted from 1.75 million yuan to 0.91 billion yuan, downgraded to "overweight" rating.

Risk hints: the process of domestic substitution is lower than expected, the development of zero-trust industry is lower than expected, and market competition intensifies.