The company releases three quarterly reports in 2023

In the first three quarters, the operating income reached 5.883 billion yuan, up 6.43 percent over the same period last year; the net profit returned to the mother was 818 million yuan, up 119.83 percent over the same period last year; and the non-return net profit was 891 million yuan, an increase of 87.84 percent over the same period last year.

In the third quarter alone, the operating income was 2.045 billion yuan, an increase of 9.17% over the same period last year; the net profit was 254 million yuan, an increase of 86.39% over the same period last year; and the non-return net profit was 294 million yuan, an increase of 75.58% over the same period last year.

Main growth drivers of the Department of payment Services and payment equipment Operations

1. From a business-by-business point of view, the cumulative transaction size of payment services in the first three quarters exceeded 1.93 trillion, an increase of 13.23% over the same period, and offline order collection business showed a significant recovery. In terms of smart terminal clusters, according to the latest Nielsen report, the company's 2022 payment equipment shipments have ranked first in the world, with overseas business revenue accounting for 74% of the cluster revenue.

two。 The gross profit margin in the third quarter was 38.6%, an increase in 3.32pct compared with the same period last year, or mainly due to the recovery of the payment industry and the increase in the share of overseas business. The rate of sales expenses, management expenses and R & D expenses decreased by 0.9pct, 0.7pct and 0.9pct respectively compared with the same period last year, and the cost was well controlled. The increase in the rate of financial expenses was mainly due to exchange rate fluctuations in the reporting period.

3. The loss of credit impairment increased by 103 million yuan over the same period last year, mainly due to the cyclical impact of the domestic economy during the reporting period, and the company adopted a more cautious method of loan provision.

4. Single Q3 is affected by the net loss of investment and the change of fair value, and the net profit of the company is affected to a certain extent.

5.

The recovery logic of payment services, superimposed by the logic of rapid growth in overseas markets, has been gradually realized, and the annual performance is expected to be positive.

We mentioned in the previous report that the company's merchant operations and value-added services benefit from the recovery of the general environment, superimposing their own strategic advantages, showing strong growth. At the same time, the increase in the proportion of overseas business will help to increase the company's overall revenue growth and gross profit margin.

Investment suggestion

Maintaining the previous profit forecast, the net profit from 2023 to 2025 is expected to be 1.202 billion yuan, 1.558 billion yuan and 2.044 billion yuan. The PE corresponding to the current market capitalization is 15 times, 12 times and 9 times respectively, maintaining the "buy".

Risk hint

After the recovery of the epidemic, the recovery of offline consumption is not as expected; the regulatory policies of regulators such as the people's Bank of China are stricter; and the liberalization of third-party payment licenses and other factors have intensified competition in the industry.