What happened: Hanwang Technology reported on the evening of October 29th that the net profit attributed to the owner of the parent company in the first three quarters was 40.0316 million yuan, down 43.0% from the same period last year, while operating revenue was 1.11 billion yuan, up 12.63% from the same period last year.
Due to the high business growth last year, revenue growth has slowed this year. 1) in the first three quarters of 2021, revenue reached 1.11 billion yuan, + 12.63% compared with the same period last year, mainly due to the high base last year, with a gross profit margin of 51.46%. Compared with 2020-2.56pct, it is mainly due to the rise in raw materials and reduced price sales of some products. 2) in the first three quarters, the company's return net profit reached 40 million yuan,-43% compared with the same period last year, mainly due to long-term development needs. The company has exceeded expectations in brand planning (such as investment on live streaming platforms such as Douyin and Bilibili), online and offline sales, research and development of AI technology and new products, staffing, and so on.
Deeply ploughing AI, actively expanding overseas markets, and constantly enriching digital painting business. 1) Hanwang Technology has begun to study bionic flapping-wing robot birds since September 2019. At present, it has launched many kinds of bionic robot birds, such as Vermilion Bird, Butterfly, Phoenix, Bi Fang, Eagle, Peacock, lark, etc., and has sold more than 200000 sets in 2020. In the level of perceptual intelligence, Hanwang Technology, as an established artificial intelligence company, has enough precipitation in the three levels of eye perception, smell acquisition and ear acquisition; in the level of cognitive intelligence, Hanwang Technology takes NLP technology as the core to build a full-technology chain system, including text classification, clustering, structured data extraction and so on. 2) in the digital painting business, professional and entry-level products are developed to meet the needs of the population and form a complete product matrix. Launched the first professional digital painting product "xencelabs" professional brand and its first painting product in the United States; for the consumer market, the product system of "XP-PEN" is further enriched, and the marketing network is further improved, while the entry-level product "UGEE" is introduced to overseas markets.
Investment suggestion: we predict that the company's net profit from 2021 to 2023 will be 0.69,1.15 and 128 million yuan, corresponding to EPS 0.28,0.47,0.52 yuan. Under the background of rising raw materials, the company's performance growth rate will decline and be downgraded to overweight rating.
Risk tips: overseas market expansion is not as expected; technology research and development is not as expected; demand is not as expected.