\u3000\u3000 Zwsoft Co.Ltd(Guangzhou)(688083) (688083)
Event: on the evening of February 24, 2022, the company released its annual performance express for 2021. In 2021, the company realized revenue of 619 million yuan, yoy + 35.64%, net profit attributable to parent company of 181 million yuan, yoy + 50.67%, net profit attributable to parent company of 99 million yuan, yoy + 3.87%. The performance express of the annual report is in line with market expectations and reaches the target growth rate of 35% of equity incentive in 2021.
In 2021q4, the revenue has improved significantly month on month. China’s education business has made great efforts, the 3D business has gradually entered the harvest period, the overseas business is expected to recover gradually, and continue 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 express of 2021 shows that the revenue growth rate of single Q4 in 2021 has reached 45.91%, which is significantly improved month on month compared with the revenue growth rate of only 10.38% of single Q3 in 2021. In 2021, the company responded to the policy guidance in the education market and was recognized by colleges and universities at all levels. It is expected that the revenue growth of education sector will be rapid. In 2021, the revenue growth of H1 company 3dcad will be 48.66% (the vast majority of the company’s R & D investment is in 3dcad products), which is higher than 39.75% of 2dcad in the same period. We expect that the revenue growth of 3dcad in 2021 will still exceed that of 2dcad. In addition, the overseas epidemic in 2021 was relatively serious, which brought some resistance to the company’s overseas business expansion and dragged down the company’s overall revenue growth. In the future, with the gradual stabilization of the overseas epidemic, the company’s overseas revenue is expected to rise again. The company continued to actively introduce excellent talents and carry out marketing activities in multiple directions. On July 26, 2021, the company issued an equity incentive plan to further bind core talents. The 2021 performance express also reached the target value of 35% income growth of equity incentive. We expect that the long-term output effect will become more and more obvious as the product continues to iterate and the product ecology is enriched (the official account of WeChat public is updated in the past six months, and the progress of ecological cooperation is updated) and the traction of the benchmark customers.
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 618 / 825 / 1089 million yuan respectively, corresponding to the net profit attributable to the parent company of 180 / 244 / 325 million yuan. Considering the high entry barriers of the industry, the company’s card position in the track, the strong promotion of industrial policies, the possibility of continuous extension and expansion of product line and the scarcity of the target, we give the target market value of 24.7 billion yuan in 2022, corresponding to 30 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.
