\u3000\u3000 Zwsoft Co.Ltd(Guangzhou)(688083) (688083)
Event: on the evening of January 27, 2022, the company released the annual performance forecast for 2021. It is expected to realize revenue of 605 ~ 625 million yuan, yoy + 32.65% ~ 37.03%, net profit attributable to parent company of 176 ~ 186 million yuan, yoy + 46.20% ~ 54.51%, net profit attributable to parent company of 93 ~ 103 million yuan, yoy-2.55% ~ 7.93% before 2021. The performance forecast of the annual report is in line with market expectations.
In the fourth quarter, revenue improved significantly month on month, and continued to strengthen R & D investment and sales channel expansion. According to our comments on the third quarterly report released on October 23, 2021, we believe that “the revenue in the third quarter may be the low point of phased growth”. The annual performance forecast of 2021 shows that the revenue growth in the fourth quarter reached 38.31% ~ 49.44%, which is significantly improved month on month compared with the 20.10% revenue growth in the third quarter of 2021. The company has been actively introducing talents and conducting marketing activities in many directions. In July 26, 2021, the equity incentive plan was released to further bind core talents. We expect that with the continuous iteration of products and the continuous enrichment of product Ecology (the WeChat official account has been updated for nearly half a year, the progress of ecological cooperation) and the traction of the benchmark customers will be promoted. The long-term output effect will become more and more obvious in the future.
Growth driving force: domestic substitution brings short-term flexibility, CAX integration drives medium-term growth, and SaaS cloud transformation in the long run. In the short term, China is a fertile land for the cultivation of industrial software. The company’s products have obvious cost performance advantages and cover only 1% of the target customers. Domestic substitution and software legalization bring development flexibility. The epidemic in 2020 constitutes a short-term obstacle to globalization. In the medium term, take the giant as an example to promote the CAX integration strategy. From the perspective of the raising and investment direction of IPO funds, CAD / CAE / CAM have corresponding capital investment layout. The accumulation of industry know-how will lead to a deeper moat of corporate competition, and the further enrichment of downstream customer groups will also reduce the impact of downstream cyclical fluctuations on corporate income. In the long run, the company will promote the transformation of SaaS cloud, but it is not a top priority. At present, there is still a certain gap between the company’s products and the world’s first tier giants (especially 3dcad products). The opponent’s cloud transformation also provides an opportunity for the company to seize market share through product cost performance to a certain extent.
Maintain the “buy” rating. We predict that the company’s revenue from 2021 to 2023 will be RMB 612 / 823 / 1109 million respectively, corresponding to the net profit attributable to the parent company of RMB 179 / 243 / 328 million. Considering the high entry barriers of the industry, the company’s card position on the track, the strong promotion of industrial policies, the possibility of continuous extension and expansion of product lines and the scarcity of the target, we give the target market value of RMB 28.8 billion in 2022, corresponding to 35 times of PS, Maintain the “buy” rating.
Risk warning: macroeconomic downside risk; The risk that the R & D input and output is less than expected; Intellectual property risk; The risk of continuous negative impact of the epidemic; There is risk of error in calculation and assumption.
