Incident: Hanwang Technology announced its quarterly report on April 28, 2021. The company achieved revenue of 367 million yuan in the first quarter of 2021, +66.68% year on year, and the net profit of the mother was 11 million yuan, +355.68% year on year.
The company's first-quarter results were in line with expectations, and the sales network layout continued to advance. 1) The company achieved revenue of 367 million yuan in 2021 and continued to maintain a rapid growth trend. Net profit was 11 million yuan, +355.68% year on year, higher than revenue side growth, and profitability improved; 2) Continued layout of sales networks and strategic layout adjustments. The company's sales expenses in the first quarter increased 28 million yuan year-on-year, +42.63%, mainly due to the sharp increase in overseas cross-border e-commerce platform sales in the first quarter and the increase in e-commerce platform sales expenses. Management expenses also increased 18 million yuan, +115.75%, mainly due to the company's strategic development needs, manufacturing The shift of business from north to south led to personnel adjustments, and management consulting expenses increased year-on-year.
3) On February 4 and February 25, Han Wang held the 29th meeting of the 5th board of directors to agree that the company would increase the number of implementing entities and locations for fundraising projects. The fund-raising projects involved Han Wang's core business and product line. This move will further provide sufficient funding for the improvement of the company's product strength.
Looking ahead to the whole year, the company will continue to stand out with the advantages of “technology+product+channel” to achieve high growth in performance and development. 1) On the technology side, the company increases investment in R&D, continuously improves technology commercialization capabilities, organically combines technology and products, and continues to deepen the AI field to ensure the stable and healthy development of the company's core technologies such as natural language understanding, artificial intelligence interaction, and pattern recognition; 2) On the product side, the digital painting business continues to launch new products, providing different products for high, middle and low end consumer markets, further expanding brand influence and market share; 3) On the channel side, accelerate the expansion of overseas markets, integrate the advantages of online sales channels to help brands go overseas and ensure the smooth development of international business.
Investment advice: We forecast that the company's revenue from 2021 to 2023 will be 24.12, 3.01, and 4,032 billion yuan respectively, net profit of 205, 239 and 272 million yuan, and corresponding EPS of 0.84, 0.98, and 1.11 yuan, maintaining the purchase rating.
Risk warning: Overseas market expansion falls short of expectations; technology research and development falls short of expectations; market demand falls short of expectations.