China's leading Internet and security service providers, maintaining a "buy" rating, taking into account the increased investment in government and enterprise security business, we downgrade the company's 2022-2023 net profit forecast of 9.01 yuan and 1.164 billion yuan (the original forecast is 30.29 yuan, 3.612 billion yuan), the new 2024 forecast is 1.481 billion yuan, EPS is 0.13,0.16,0.21 yuan per share The current stock price corresponds to the PE of 63.4,49.1,38.6 times from 2022 to 2024, considering that the company is the leading Internet and security service provider in China and maintains a "buy" rating.
The performance in 2021 is in line with expectations, and the security business is growing rapidly.
In 2021, the company achieved operating income of 10.886 billion yuan, down 6.28% from the same period last year, of which Internet advertising and service revenue was 6.306 billion yuan, down 16.06% from the same period last year; smart hardware business revenue was 2.063 billion yuan, down 3.68% from the same period last year; Internet value-added service revenue was 1.104 billion yuan, down 2.67% from the same period last year; security and other business revenue was 1.381 billion yuan, up 70.91% from the same period last year. The company achieved a net profit of 902 million yuan, down 69.02% from the same period last year, and the net cash flow from operating activities was 166 million yuan, down 91.48% from the same period last year, mainly due to the decrease in revenue from Internet advertising and services and the increase in investment in security business.
The order for 2022Q1 security business was received smoothly.
2022Q1 achieved operating income of 2.526 billion yuan, down 1.03% from the same period last year, and net profit of 222 million yuan, down 17.98% from the same period last year. Q1 company security business orders have progressed smoothly, 547 million yuan of urban safety orders have been completed, and safety-related revenue has reached 39.6% in 2021.
Security business has actively expanded its market and achieved remarkable results.
By empowering related products through "cloud security brain" and "core security brain", the company has significantly increased the overall customer coverage of the security business and completed the full coverage of key customers. the number of regional customers and newly signed amounts have increased significantly: the company has completed a total of nearly 2000 new contracts with customers, covering more than 90 per cent of central ministries and commissions, 80 per cent of central enterprises and 95 per cent of large financial institutions. And carried out network security cooperation with millions of small and medium-sized enterprises.
Risk tips: the impact of the epidemic on the company's business, government and enterprise security business development is not as expected.