Principal Century 1H23's revenue is 180 million yuan, + 4.3% compared with the same period last year, which is in line with our expectations
Principal Century announced 1H23 results: income 180 million yuan, year-on-year + 4.3%; return to the mother net loss of 27.8 million yuan, year-on-year turning loss, deducting non-return return net loss of 27.7 million yuan, year-on-year turn loss; operating cash flow-54.9 million yuan, year-on-year expansion of 1.9% In the single quarter, 2Q23 income was 130 million yuan, year-on-year + 18.4%, month-on-month + 144.3%, net profit of 4.8 million yuan, down 82.2%, and net profit of 5.1 million yuan, down 78.2% from the same period last year, in line with our expectations.
Trend of development
Downstream demand is steadily recovering. In the customer dimension, the income of the 1H23 financial industry was 100 million yuan, down 14.2% from the same period last year, narrowing the quarter-on-quarter decline; the government industry income was 39.823 million yuan, an increase of 84.2% over the same period last year, mainly due to the recovery of procurement and demand in the data bureau, public safety, health care, tobacco, water conservancy and other departments. The income of the enterprise industry was 37.33 million yuan, + 18.3% compared with the same period last year, mainly due to the increase in customer procurement demand, such as the information technology software industry, manufacturing, financial services and so on. At the level of gross profit margin, 1H23 gross profit margin decreased by 5.0ppt to 69.2% compared with the same period last year, 7.7ppt to 67.4% compared with the same period last year, and 6.2ppt from the previous year.
The profit in the second quarter alone improved significantly compared with the previous quarter. The 1H23 net interest rate is-15.6%, down 30.5 ppt 2Q23 from the same period last year. The net interest rate is 3.8%, the 21.4ppt is lower than the same period last year, and the 66.8ppt is higher than the previous year.
At the level of three fees (sales, R & D and management), the total three fees of 1H23 increased by 49.6% to 170 million yuan compared with the same period last year, and sales / R & D / management increased by 39.7% 32.2% to 4,885 million yuan respectively compared with the same period last year. 2Q23 three fees increased by 53.4% to 91 million yuan, and sales / R & D / management increased by 30.2%, 71.7%, 45.9% and 231047901.9 million yuan, respectively. According to the company announcement, in order to support the future rapid development, the company reserves high-end talents in technology research and development, product planning and program promotion, and increases employee compensation and equity incentives, so the cost has increased during the period.
Actively enrich the product matrix and enhance competitiveness. During the reporting period, the company released two products, cloud service password machine and video security all-in-one machine, which combined with password service platform to provide compliance, security, high efficiency and various password security services for cloud tenants. The video security all-in-one machine helps users to meet the security requirements of video surveillance and ensure video security compliance. At the same time, the company completed the acquisition of universal technology, adding cross-network isolation switching, terminal security control, data security archiving and other three categories of products, enriching the company's product matrix.
Profit forecast and valuation
We keep the company's 2023 Universe earnings forecast unchanged for 2024, and the current share price corresponds to 21.5 times 21.5 times Pmax E in 2023 Universe. To maintain an outperforming industry rating and 40x Pamp E in 2023, due to the increase and transfer of equity in June and July 2023, the total equity of the company increased by 55.2% to 213.9 million shares compared with April, corresponding to a target price of 40.8 yuan, corresponding to 2023 Universe 2024 40xPUBE, which has 46.8% upside space compared with the current share price.
Risk
Downstream customer demand is not as expected, new product expansion is not as expected.