Event: Tournament Information Releases 2023 Annual Report and 2024 Quarterly Report. In 2023, the company achieved revenue of 2,254 billion yuan, a year-on-year decrease of 0.75%; realized net profit of 255 million yuan, an increase of 1.98%; realized deducted non-net profit of 186 million yuan, a year-on-year decrease of 17.27%; and gross margin of 35.56%. In the first quarter of 2024, the company achieved revenue of 540 million yuan, an increase of 4.51% year on year; realized net profit of 0.2 billion yuan, an increase of 216.45% year on year, turning a loss into a profit.
Revenue from intelligent manufacturing is growing steadily, and performance is expected to gradually recover. The main reason for the slowdown in the company's performance growth is due to factors such as the continued contraction of demand in the manufacturing market, intensification of trade conflicts, and the complex international environment. The pace of recovery in the manufacturing industry is slow, and total profits have declined. In terms of revenue: There was a slight decline in the company's revenue in 2023. Among them, the pan-ERP sector achieved revenue of 1,219 billion yuan, a year-on-year decrease of 1.7%, mainly affected by the slowdown in digital investment by individual major customers and the slowdown in the pace of acceptance confirmation of some projects; the intelligent manufacturing sector achieved revenue of 830 million yuan, an increase of 2.56% over the previous year, with steady growth. Sales and marketing: In 2023, the company's orders increased 8.7% year over year.
The company actively explores incremental business markets from both industry and regional perspectives. Among them, the North and Southwest markets grew significantly. Orders from the northern region increased 34% year-on-year, and orders from the southwest region increased 171% year-on-year; on the industry market side: customer orders in the new energy sector increased 137% year-on-year. Over 230 new customers were added throughout the year, accounting for 21.66% of the total number of customers.
Adhere to the strategy of transformation to products and services, and self-developed products are gradually being recognized. The company has achieved remarkable results in developing self-developed customers, and the licensing revenue for self-developed products exceeds 130 million. Pan-ERP field: In 2023, the company's self-developed platform successfully replaced some mainstream ERP application modules in central enterprises abroad, and was switched online on a large scale during the year. Financial integration and budget management products have successively gained leading customers in industries such as new energy, fast lock and fast consumption; integrated supply chain products have also been signed and launched with customers in the communications electronics and consumer electronics industries. In addition, the company released the AIGC platform, a major manufacturing service model, and became one of the first partners of Huawei's “Pangu Big Model”.
Continue to broaden the product line and grasp the clustering and localization of the manufacturing industry. Intelligent manufacturing field: The company's industrial Internet was selected for the Ministry of Industry and Information Technology's “double span” platform list. New MBM products were released during the year to achieve collaboration between supply chain planning and logistics, and integrate energy management with equipment asset management. Furthermore, the company is actively cooperating with Huawei to jointly develop a scenario-based tool chain system based on the Huawei IDMe next-generation SMOM joint solution using the “platform+industry application” model to achieve data-driven and information collaboration.
Profit forecast: We expect EPS to be 0.72/0.88/1.06 yuan in 2024-2026, and the corresponding PE will be 22.28/18.42/15.23 times.
Risk warning: 1. Downstream economic recovery falls short of expectations; 2. Market competition intensifies; 3. Performance forecasts fall short of expectations.